What are the interest rates on the cash market?

money market interest rates are based on how much interest the bank or credit union can pay off to its customers and still total profit. As a result, these interest rates are influenced by fees charged to customers and how much money these financial institutions earn on their loans and business investment. The overall health of the economy also affects these rates. Financial institutions must pay costs, such as overheads of the office, salaries of employees and dividends of shareholders before the interest rates on the money market can be able to determine. The difference between how much is paid and how much is earned is called spread. This dissemination helps to determine what interest rate of the cash market every financial institution can pay and still make money. A larger span usually means that more money is available to pay the interest of the savings account to customers.

Banks and credit unions earn money when customers accept loans and pay interest. The higher the interest on the loan, the more J FundsE available to pay interest on savings accounts such as money market accounts. In general, part of the interest obtained from loans is repaid to customers with savings accounts such as money market accounts.

The part of the money that the bank or cooperative credit union pays off, because interest rates on the cash market also come from interest obtained from their own investments of the financial institution. They may include deposit accounts in other financial institutions and investments in the stock market, such as mutual funds. The more money the financial institution can earn from its own investment, the more money it will be available to pay as interest from the money market.

The total health of local and international economies will affect the investment of financial institts. As a result, interest rates on the cash market that can be offered will be influenced by the overall economy. When a bank or cooperative credit union loses money for its investment, moHou Being interest rates of cash market reduced.

Expenditure must be paid before financial institutions determine interest rates on the money market. After the Bank or Cooperative Backup determines how much income it has and covers all its expenses, such as overhead costs, salaries of employees and dividends of shareholders, it can determine how much money remains to pay their interest rates on the money market. Therefore, financial institutions with lower overhead costs can be able to pay higher interest rates on the market market.