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Federal Funds Rate
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Prime
PLR stands for Prime Lending Rate. This is the rate of interest at which banks grant loans to their best customers. Usually the PLR is comparable and has very little difference between banks. The PLR is usually very similar among banks
Federal Funds Rate
Federal Funds Rate
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They charge a much higher interest on loans than they pay on deposits.
Prime
PLR stands for Prime Lending Rate. This is the rate of interest at which banks grant loans to their best customers. Usually the PLR is comparable and has very little difference between banks. The PLR is usually very similar among banks
Banks charge interest when providing loans which are called libor rates. These are usually applied to loans that are 1, 3, and 6 years. Libor rates are usually very high because of the popularity of these loans.
Banks let customers borrow the money that you keep in your savings account. Since they offer you an interest on the money you keep in your account and they need to make a profit from the loans they grant, they usually charge more interest. This interest is usually atleast 2-3% greater than the interest they offer on deposit accounts.
By paying out less in interest on deposits than it earns in interest on loans
They loan out the money in their customers' accounts and charge a higher interest rate on the loans.
Federal funds rate.