Why do banks and building societies advertise high interest savings accounts?
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Surely the higher the interest rate, the more the organisation will have to pay out (thus the greater the financial loss thereon).
Why would a bank or building society want to encourage the loss of its shareholders' or members' money? What is to gain from drawing customers in this manner?
Why do banks and building societies advertise high interest savings accounts?Banks need to attract money on deposit (savings) in order that they can provide lending facilities (personal loans, credit cards etc) to customers. If they don't do atract deposits then they have to borrow money from the money markets which is less attractive for banks as it is not self financing and therefore more costly.
Why do banks and building societies advertise high interest savings accounts?Believe me..they make more money on the money you invest, than the interest that you're making.
They're in it for profit, not charity!
Why do banks and building societies advertise high interest savings accounts?The more money they get in, the more they can lend out at a higher rate, thus making more money.
Why do banks and building societies advertise high interest savings accounts?They want your business. You put money in their bank and they loan it out at an interest rate far more than what you will get. Banks make their money in their loan departments.
Why do banks and building societies advertise high interest savings accounts?Banks and Building Societies use the money in customers accounts to invest for themselves e.g. If we invested 拢100 in the stock market we would make 拢10. If the Bank pools all of their clients money ie 拢10 million they would make 拢100,000. when they give away 6% to their members accounts, they have 94% to keep for themselves - not bad for a days work!
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