Deposit Interest Rate

Aside from cosmetics or subjective preferences, most businesses are aware that they need to be competitive in service, value, or price to attract market share away from their rivals. When comparing cars, the areas may be in terms of miles per gallon of gas efficiency, safety features, or handling and acceleration.

When comparing chef’s knives, balance, edge sharpness, and weight might be the quantitative factors. What’s there to compare about banks? Apart from branch location convenience, most banks offer the same basic services. Perhaps the deposit interest rate, or how much the bank will pay you to park your money with them, is where the apples-to-apples comparison can be made?

The deposit interest rate can vary depending on the vehicle. A checking account, where money will enter and exit more frequently, may offer less than a savings account, which in turn will be less than a Certificate Deposit. The reason is that the longer you leave the money at the bank undisturbed, the more uses the bank can find for it without worrying about having the extra liquidity on hand.