If the fed controls intrest rates, then how come banks all offer loans at different intrest rates?

depends on how much profit the bank wants to make!!!

If the fed controls intrest rates, then how come banks all offer loans at different intrest rates?payment calculator

fed rate is what banks borrow money from the goverment.

the difference between the rate you pay and the rate the bank borrows money at is called income to the bank.

This is a very simple explaination.

If the fed controls intrest rates, then how come banks all offer loans at different intrest rates?

loan

The interest rate the Fed controls is called the Prime Rate, and it is the rate that banks charge EACH OTHER to lend money. Based on what the banks have to pay to get the money that they lend to you, they set the interest rate.

That is only part of the way they set interest rates. It is kind of like an %26quot;overhead expenses%26quot; cost...so car loans might cost a higher or lower interest rate than a home loan, because of how much it costs the bank to lend you that money, and make a profit. Part of that cost includes people who default (don%26#039;t pay up!). Most student loans are guaranteed by the government, so they get paid. Most car loans have a car they can at least repossess and sell, so that is factored in, but a car can be wrecked, or stolen, or hidden. Houses are harder to hide or wreck, but cost more...so that%26#039;s factored into home mortgage rates. Big banks have more resources than small banks, but small banks offer low rates to get people in the door.|||The feds don%26#039;t control the banks . They try to make a profit and increase the interest rates.|||The Fed is not a government agency, it is a federally chartered (incorporated) private banking corporation with member banks. It controls the prime rate, and the money (credit) supply by restricting how much money banks can create through fractional reserve banking by adjusting their reserve requirements. Currency is someone else%26#039;s debt - usually the federal government%26#039;s debt.

What the other banks charge for interest is their business, and what the market will accept. This subject is very boring -- but extremely profitable....