Information on the Best Savings Interest Rates

2007-03-08 10:33:40

( Financial )



Interest is the cost of money and is also referred to as cost of funds. It can also be said that Interest is paid when a loan is taken. Interest is received when money is given on loan or deposit to another person.

Interest rates are always dependent on the rates fixed by the government and market.
The interest that one gets on his savings is again dependent on the institution with which the money is deposited.

Savings account interest rates are always the lowest compared to other deposits since the savings are for short term. Savings account is the safest, although the interest rates are lower. But, on the other hand, the savings interest rates of these bank accounts are still dependent on the money in the savings accounts.

Thus, you should consider the most vital factors of a savings account that would provide you the best savings interest rates. By carefully comparing the interest rates that each financial institution offers its savings account depositors, you are assured of getting an account from a bank that offers the best savings interest rates. Plus, you should keep in mind that the most stable financial institutions usually offer the best savings interest rates.

Higher risk gives higher interest, like in the form of credit cards or loans. The credit card rates are also linked to prevailing interest rates. However, the credit card rates are normally high, since the companies run a risky business.

Loan rates including jumbo loan rates rate are fixed by loan companies in keeping the market in mind. Demand and supply determine the interest rates very much. When demand for money is more and the savings fall, there will be an increase in interest rates.

Mortgage interest rates are always low since the loans are mostly secured. Student loan rates are also lower compared to top business loans. Banks and financial institutions that accept deposits and pay interest deploy their funds in a variety of instruments. These include stocks and shares and bonds.

These institutions have to make an income to pay their depositors and so charge interest on their loans. The prime lending rates are normally fixed by the Central Bank keeping the money supply in mind. Commercial interest rates are often linked to such prime rates.


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