banks charge a higher interest rate on loans than what they offer on____________^
Answers
Answer: Deposits
Explanation:
Banks charge a higher interest rate on loans than what they offer on deposits. They do so to make profit.
The term interest rate refers to a percentage that is charged on the principal amount lent by the lenders. The word principal refers to the amount of money lent.
This is how a bank works by providing attractive interest rate to the depositors on their deposit for using their funds.
Banks use the funds lying in the accounts of the individuals by providing funds to the loan seeker. In order to garner funds for loan, the bank provides attractive interest rates to the depositors which is higher than the savings account interest. Once the fund is provided by the depositors the bank then provide fund to the loan seeker at a higher rates and earn profit from the differential interest rates.
Hope this helps.
Answer:
Deposits
Explanation:
Only for 1 marks question it is good answer