Why Do Some Accounts, Like Savings Accounts At Your Local Bank, Earn Interest?
Why Do Some Accounts, Like Savings Accounts At Your Local Bank, Earn Interest? The correct answer is because the bank pays you to use your money
by J Nandhini
Updated Nov 01, 2023
Article continues below advertisement
Why Do Some Accounts, Like Savings Accounts At Your Local Bank, Earn Interest?
The correct answer is "because the bank pays you to use your money"
Savings accounts, like the ones at your local bank, earn interest because the bank uses the deposited funds to make loans and investments. In return for allowing the bank to use your money for these purposes, they pay you interest as a form of compensation. This interest is a percentage of the balance in your account and is typically paid out periodically, such as monthly or annually. It's a way for the bank to incentivize individuals to save and keep their money in the bank, while also generating revenue for the bank through the interest earned on loans and investments.
Related Articles
Quiz Questions On Insurance and Risk Management - 3
373 days ago
Quiz Questions on Credit Management and Awareness
374 days ago
Disclaimer : The above information is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.