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Fact is simple . . .
What you are really doing is loaning the bank your money to make money off of so in return for the use of your money - the bank pays you a fee - that we call interest - which is usually variable over time but can be fixed for a term or a period of time and/or the interest rate guaranteed over this time period.
Quite often guaranteed interest rates on money loaned to the bank are called Guaranteed Investment Certificates or GIC's wherein the interest paid to the bank customer is guaranteed at a specific rate of interest or a fee over a period of time so that the capital or amount of money invested will be paid back in a total amount of the capital and the interest earned.
However, one can find banks that will pay back the interest on a annual or monthly basis at a specific guaranteed interest rate over a specific period of time and return the original invested capital at the maturity date or the end of the agreed upon time period that the money would be lent to the bank for.
Traditionally the banks in turn, loan out the same money given to them to 'others' for a specific period of time at an interest rate of 3% more than what was paid to the investor - this is commonly called 'the spread' in the banking industry.
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Why do banks pay their customers interest in 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 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.
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.
Why do banks pay their customers interest on the money in their accounts?
That money earns interest when the bank loans it out.
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.
What banks pay to their savings account customers?
Interest
Why do banks pay their customers interest in 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 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.
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.
Why do banks pay their customers interest on the money in their accounts?
That money earns interest when the bank loans it out.
Why do banks pay their customers interests 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 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.
How banks afford to pay interest on their customers' savings account deposits?
They loan out the money in their customers' accounts and charge a higher interest rate on the loans.
Why do banks pay their customer interest on the money in their savings account?
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.
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 can banks afford to pay interest on their customers savings account deposits?
The bank does not just hold on to the money you retain in your savings account. Instead, they offer loans to other customers using that money. The loan customers pay an interest to the bank and the bank in turns offers the savings account holders an interest. Since banks make money by lending our money, they offer us an interest.
What do banks do with some of the profits they make loaning out the money in their customers saving accounts?
pay interest on savings accounts
