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It comes from your bank, and their profits.
It may seem very well that some banks (well not today) give great interest rates on their savings accounts, basically they want all of your money invested in them, and they reward you by giving you money from other sources.
For example, all the charges people receive in their credit cards, loans etc etc for late payments, this is the interest you receive.
Personally i feel interest is wrong (as do many people in this world) as money should be earned, however in a selfish western culture we don't consider this.
Therefore the £5 you get for free probably comes out of a low-income families struggle, to find enough money to get their kids through.
Just a thought :)
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ACTUALLY, banks use your money to lend to other people for things such as mortgages, and charge them an interest that's higher than what your account receives in interest. That way you get the money back plus whatever interest was generated on your account and the bank still makes a profit.
Interest is also a great idea because it does NOT come from poor families and it increases the amount of money in your account so if inflation occurs, your money won't be worth squat. Could you imagine if your great-great-grandfather opened a savings account in the past and deposited $50 (a lot of money in his time!) and the money was passed down to you and it had accumulated to STILL $50 because interest was "selfish"? Grampy should've just spent it when he had the chance and bought a nice leather couch or whatever. Now, thanks to interest, you can put money that is worth a lot in your generation into an account for your children and it won't only be able to buy them a big mac in 50 years.
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What is a compound interest savings account?
Its where your savings account earns interest on the interest.
What is a savings or deposit account?
It is a bank account where a person will make regular, monthly savings to build up capital. The savings or deposit account will not normally come with a card or cheque book and the savings in it will attract a higher rate of interest than a normal bank account. However you lose this high rate of interest if you withdraw your money suddenly or before a certain period,
What type of interest rate can you expect from a high yield savings account?
Interest rates vary depending on the bank the savings account is in. For a high yield savings account, interest rates can be from 0.95-3.0% annual percentage yield.
What is considered to be a high interest savings account rate?
High interest savings account rates vary, depending upon the bank a person selects. A higher interest savings account rate could be anywhere from 0.75% to 1.00%.
What exactly is a high interest savings account?
With a high interest savings account, the saver can get a large return on their savings. At current rates, the interest can range between 3-5%. However a large amount of accounts with higher interest may impose a penalty if you withdraw from that account.
What is a compound interest savings account?
Its where your savings account earns interest on the interest.
Savings account A has 1500 and pays 3.5 percent interest yearly Savings account B has 1400 and pays 4 percent interest yearly The savings account that earned the most interest after one year is?
Account B
What is a savings or deposit account?
It is a bank account where a person will make regular, monthly savings to build up capital. The savings or deposit account will not normally come with a card or cheque book and the savings in it will attract a higher rate of interest than a normal bank account. However you lose this high rate of interest if you withdraw your money suddenly or before a certain period,
What's one difference between a checking account and a savings account?
savings account earns interest.
What makes a savings than a checking account account a better investment?
A savings account earns interest.
What type of interest rate can you expect from a high yield savings account?
Interest rates vary depending on the bank the savings account is in. For a high yield savings account, interest rates can be from 0.95-3.0% annual percentage yield.
What is considered to be a high interest savings account rate?
High interest savings account rates vary, depending upon the bank a person selects. A higher interest savings account rate could be anywhere from 0.75% to 1.00%.
What is an example of interest-bearing account?
An Interest bearing account is a bank account in which, the banks pays you an interest for keeping your money deposited in that account. Ex: Savings Bank Account - You usually get around 3.5% rate of interest on the money you hold in your savings account in India.
How can one obtain the best interest on savings?
One might obtain the best interest on savings by looking at the different interest rates banks offer and opening a savings account with that bank. Another way to obtain the best interest on savings is to open a Tax Free Savings Account.
What is a high interest savings account?
With a high interest savings account, the saver can get a large return on their savings. At current rates, the interest can range between 3-5%. However a large amount of accounts with higher interest may impose a penalty if you withdraw from that account.
What exactly is a high interest savings account?
With a high interest savings account, the saver can get a large return on their savings. At current rates, the interest can range between 3-5%. However a large amount of accounts with higher interest may impose a penalty if you withdraw from that account.
Which has a higher interest rate checking or saving?
Generally a savings account pays more interest, but there are some checking accounts that offer rates that are very competitive to savings accounts.
