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To encourage you to deposit money which they can invest and make more off of.
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∙ 11y ago
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Why can a bank afford to pay an interest rate on a savings account?
because the bank lends money out at a higher interest rate
What is the journal entry to pay the interest on a loan?
Debit interest on loanCredit cash / bank
What is a bond and how interest are paid?
Bond could for instance be if you lend money to the government. They would pay you an interest like if you would pay an interest in the bank.
What does it mean to pay interest on an account?
The term pay interest is usually used along with loan accounts. This is the charge/money you pay a bank for the lending facility they have extended to you. For Ex: If I borrow USD 1000 from a bank @ 5% rate of interest per year, I have pay $50 as interest every year to the bank for the $1000 loan they gave me. If I plan on paying it in 10 equal installments, I will pay $105 every month for 10 months to repay the $1050 I owe the bank. Here the $5 I pay every month can be considered as "Paying Interest on my Loan Account"
Why do banks pay their customers interest on the money in their accounts?
That money earns interest when the bank loans it out.
Do you have to pay interest on a bank overdraft?
do you have to pay interest on a band overdraft ?
Why do you receive interest on money that you keep in the bank?
The bank is paying you (compensating you) for the use of your money. When you borrow money from the bank, you pay them interest.
Does the bank open accounts for children and does the bank pay interest?
Yes but it depends on the bank.
Why can a bank afford to pay an interest rate on a savings account?
because the bank lends money out at a higher interest rate
By definition a bank that pays simple interest on a savings account will pay interest?
s
What is the journal entry to pay the interest on a loan?
Debit interest on loanCredit cash / bank
What is a bond and how interest are paid?
Bond could for instance be if you lend money to the government. They would pay you an interest like if you would pay an interest in the bank.
What does it mean to pay interest on an account?
The term pay interest is usually used along with loan accounts. This is the charge/money you pay a bank for the lending facility they have extended to you. For Ex: If I borrow USD 1000 from a bank @ 5% rate of interest per year, I have pay $50 as interest every year to the bank for the $1000 loan they gave me. If I plan on paying it in 10 equal installments, I will pay $105 every month for 10 months to repay the $1050 I owe the bank. Here the $5 I pay every month can be considered as "Paying Interest on my Loan Account"
Does a bank in bankruptcy pay interest on Cd's?
Generally, yes.
Why do banks pay their customers interest on the money in their accounts?
That money earns interest when the bank loans it out.
Is bank interest classed as revenue?
Yes. The interest earned by the bank is revenue to the bank and the interest paid by the bank to its deposit customers is revenue for the customer. Either ways it is considered an income or revenue. And, the person earning this revenue is liable to pay taxes for it.
How can bank afford to pay interest on your saving?
Basically, it is about the savings-investment process. The accumulated fund from individual savers are used by the bank on their other financial services which is called loan. In essence, they generate interest from loan and they pay interest on individuals' savings.
