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Answered 2012-05-21 03:19:26

It varies, interest is typically paid monthly or quarterly depending on the type of account it is. Checking accounts ususally pay interest monthly while savings and certificates typically pay interest quarterly. It is up to the bank on how often they pay interest.

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Why are banks willing to pay interest on their customers deposits?

Banks are willing to pay interest, because they are turning around and loaning that money out to other people for more interest. They still make money on the deal, and offering interest often attracts customers with larger stacks of money.

Do banks pay compound interest?

Yes & No. Some Banks usually pay interest that can be compounded every quarter on most fixed deposit plans. But, this is not applicable to all banks. Most banks still pay only simple interest on all deposit schemes.

How are interest only loans calculated by banks?

By using the principal amount and the interest to calculate the total. This is the rate of interest. Also they take into consideration the loan length and time you would pay back the loan.

Why do banks give interest on deposit?

Banks make money by lending money to people and charging people for borrowing. The amount banks charge is called interest. Banks borrow money from other people and pay them interest on the amount borrowed. Banks charge more interest on the money they lend than they pay one the money they borrow. That is how they make money. When people deposit money with a bank, the bank is literally borrowing money from some people so they can lend it to other people. That is why banks pay interest.

Why do banks pay their customers interest on the money in their savings accounts?

The bank charged interest when it loaned that money to someone else. So in return, the banks pay their customers interest on the money they borrowed from their savings accounts.

Why do banks pay their customers interest on the money in their accounts?

That money earns interest when the bank loans it out.

Banks pay their costumers interest on the money in their accounts for what reason?

Banks pay their consumers interest on their money in their accounts because, the same money is what the bank use to lend loans to other customers. As they are going to earn an income through the interest they charge the loan customers, banks give a portion of that interest as interest for the customers who have deposited their money with them.

Do most banks offer the same products and services to their customers?

In general banks lend money and pay interest on savings. The large banks often are in insurance and fiancial planning as well, thus some banks do more than normal banking activities.

Why do bank savings account interest rates change over the years?

The interest rate at which they lend out money changes, which changes your interest rate. Banks are a buisness and if their interest rates are lower then your interest rates, they make no money on it. The interest rate taht banks pay is changed because the rate that banks pay to the govenrment changes. Whnever the federal reserve rate changes,your interest rates can change.

Do banks pay interest on your savings account just to be generous?

Banks pay interest on savings accounts to give depositors an incentive to keep money into their savings accounts, which the bank will be able to use to generate a profit, usually by loaning it to someone else. That is the main business of banks.

How do banks make money when it pays interest on deposits?

They charge a much higher interest on loans than they pay on deposits.

When you lease do you pay interest on the price of the car?

The interest is calculated on the purchase price (not the msrp or the difference between the price and the residual) so negotiate as big a discount as you can to pay less interest.

How much interest will you pay on a loan of 1000 over 3 years at an APR of 7.5 percent?

It depends on how often the interest is calculated but if the AER (Annual Equivalent Rate) is 7.5%, you will pay 1000*(1.075)3 - 1000 = 1242.30 - 1000 = 242.30 in interest. This assumes that none of the capital is paid back.

What do banks pay to people with a saving account?

bank pays bonus and interest on saving accounts

What do banks do with some of the profits they make by loaning out the money in their customers' savings accounts?

Pay interest on deposits, use it for their operational expenditure, to pay salaries to its employees etc. Pay interest on savings accounts

How are home mortgage rates calculated?

Mortgage rates are calculated based on the 10-year Treasury bond. This mean that usually when bond rates go up so do interest rates and interest rates are part of what we pay when we pay our mortgage. Mortgage rates are also calculated based on how much of a loan we need to finance our home purchase. One will pay an interest rate on the loan amount.

Does putting money in a bank go in the stock market?

The two major banks used by Western societies are savings banks and investment banks. Saving Banks are precisely what the name suggests; they hold on to it for you. This money is often used or loaning out to people in the form of mortgages and the like (which the bank collects interest on for profit), which is where banks make the money to pay you interest in money you keep in your account.Investment Banks (or Commercial Banks) are more designed for investors and businesses looking to indirectly turn a profit. The main difference here is that these banks typically trade securities and play the markets to make their profits, instead of through interest on loans.

Is paying interest on savings accounts profitable?

Banking is a business in purist term from a banks perspective. They wouldn't take up an activity if it is not profitable for them. Let us say you own a bank and cannot afford to pay interest on savings accounts. Would you continue to incur losses and pay interest? I don't think so. So, to answer the question, yes, paying interest on savings accounts is profitable to most banks. That is why they pay us interest.

What is the difference charged by banks on loans and the interest paid on the money deposited?

It is the income for the bank. Banks charge loan customers an interest whereas they pay an interest to deposit customers. The difference in interest rate is the income for the bank. They will use that for their operating expenses as well as to make a profit.

How often do Treasury bonds pay interest?

Treasury bonds are sold at thirty-year maturities and pay interest every six months.

Why are banks willing to pay interest on their consumers' deposits?

Banks are the financial intermediaries of the economy. Without them there will be no financial prosperity. Banks accept deposits from people who have surplus and lend out loans to people who need the money. They offer other services like bank accounts, credit cards etc. They are willing to pay interest on the consumers deposits because - they use those deposits to grant loans to other customers. The loan customers pay the bank a higher interest on the loan amount. Usually the rate of interest at which banks offer loans is significantly higher than the rate of interest they give to bank deposit accounts

Why do bank still charges interest on loan?

Because, charging interest is one of the main sources of income for banks. Since you are borrowing money from the bank, it is the banks right to charge you an interest for lending you that money. Since they are giving you the money for your use, you are bound to pay them an interest for getting money from them.

Which banks pay the best interest on checking accounts.?

Hey, you tell US who's cheaest / best!

Why are certificate of deposit interest rates so high?

Banks pay you a premium interest rates for leaving your money untoched for a predetermined amount of time.

How do the commercial banks makes money?

By lending money and charging interest.A bit more:Banks also make money by investing the money of their depositors at a higher paying intesest rate than what they pay their depositors. For example, if they pay me 1% interest on the money I have in their bank, they then invest that money for more than the 1% they pay me.

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