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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.
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∙ 10y ago
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What are some ways lenders might take advantage of low-income consumers?
BY charging monthly fees for small accounts, not paying any interest or very low interest on savings in small accounts and steering them toward high fee & interest loans.
Why would corporations want to achieve zero balances in their checking accounts?
to earn more interest
How can banks afford to pay interest n their customers savings account deposits?
Because they're loaning the money in those deposits at double or more the interest rates that they're paying the depositors.
What is a 575 credit score?
Having low score of 575 probably means you have quite a bit of debt (high balances) and possibly slow paying accounts (not paying on time). These customers are usually paying interest every month.
If you are not paying your creditors will you lose the money in your bank accounts in the bankruptcy?
Yes, once the bankruptcy is filed checking and savings accounts become part of the debtor's assets and the accounts will be "frozen" until the trustee determines the amount of funds that are not exempt under BK law and can be seized to pay creditors.
Can money market accounts be used for savings?
Yes, money Market Accounts have often been used for savings. In recent years, they have been paying virtually no interest, so other forms of savings may be more advantageous.
What are some ways lenders might take advantage of low-income consumers?
BY charging monthly fees for small accounts, not paying any interest or very low interest on savings in small accounts and steering them toward high fee & interest loans.
Why is it difficult for the fed to gather and evaluate information about M1 and M2?
The money supply is measured in terms of M1 and M2. New savings and investment opportunities have appeared. Keeping track of the growth of M1 and M2 becomes more difficult as money is shifted from savings accounts into interest-paying checkable accounts.
If you invested 15000 In two accounts paying 6% and 8% annual interest. If the total interest for the year was $1120 how much interest was earned at each rate?
You invested $15,000 in two accounts paying 6% and 8% annual interest, respectively.
What does the acronym AER stand for?
The acronym 'AER' standards for 'Annual Equivalent Rate'. This is an estimate of the rate of interest a saver will receive on the balance of their savings account in a year, assuming that no withdrawals are made. For example, if a saver deposits $1,000 in a savings account paying an interest rate of 5% AER, at the end of the year the account balance would be $1,050. As some savings accounts pay interest on a monthly or quarterly basis rather than on an annual basis, the Annual Equivalent Rate calculation is used to make comparing savings accounts easier.
Where can one find more information on the cash ISA limit?
A cash ISA is a savings account that allows an individual to save money and earn interest without paying UK income tax. Information on these accounts can be found on the website for Barclays.
How could one have legal offshore savings accounts in Switzerland?
Offshore savings accounts in Switzerland are not illegal as long as one is not deliberately channeling money through them to avoid paying tax. One can open such accounts by visiting the websites of UBS Switzerland or Credit Suisse and applying online.
You want to know what is the most savings way to pay off a home loan paying the principal or interest and why?
yes
Does U.S. Bank offer any high yield savings accounts?
U.S. Bank does not currently have any high interest savings account. The highest paying account the bank currently has is 0.85% in a money market savings account. The highest yield available at US Bank (for a savings account) is the Package Money Market Savings account with yields up to 0.85%. This account must be opened with a US Bank Silver, Gold or Platinum checking account.
How do interest rates affect household saving?
Well you need to look at it from both the perspective of receiving interest payments and paying interest. In relation to paying interest, household savings generally decline with low rates. This is because when you are paying low interest rates on the things you purchase you are also receiving low rates on your savings. This usually has the affect of boosting the economy. If rates are low people are enticed to spend their money since a) they are getting a small return on their savings and b) borrowing money is costing them little. When interest rates are high it generally increases household savings for exactly the opposite reasons low rates decrease savings. High interest rates when borrowing also mean higher rates for saving. Economies that are experiencing high rates of inflation will raise interest rates. Nobody wants to pay alot in interest so as rates climb they borrow less and save more. This is removing money from the economy and putting it into savings thereby slowing demand for goods and increasing supply. This will usually reign in inflation, and increase household savings.
Why would corporations want to achieve zero balances in their checking accounts?
to earn more interest
What are the types of bank account?
There are three major classes of accounts that can be broken down into individual accounts: transactional banking accounts, credit accounts, and investment accounts. Note that not all banks have all three, but those are the main classes. The main class of accounts banks offer are transactional accounts, usually just called banking accounts. These include savings accounts and checking accounts. Money usually flows between these accounts and other accounts outside the bank, and can either be interest-bearing or non-bearing depending on your banks terms. This last bit refers to whether the account pays interest or not- typically, savings accounts do pay interest while many checking accounts pay no interest. The second class of accounts are the credit accounts, which include loans, mortgages, and credit cards. When applying for a Mortgage or other loan you work with a bank's loan officer who looks up your credit score, while a centralized credit department handles decisions regarding credit cards. The third class are investment accounts, which include retirement accounts, brokerage accounts, and Certificates of Deposit. Certificates of Deposit, or CDs, are similar to savings accounts, yet the customer cannot take money out without paying penalty fees. therefore, this should be seen as an investment. The other types, retirement accounts (typically IRA's) and brokerage accounts act similar to each other: you put money into the account, choose some stock or let an agent pick for you, and let it sit there. An IRA is usually a "set and forget" style account with occasional tweaks, while those that hold brokerage accounts tend to want more control over their money and assets...
