Sunday, August 9, 2009

Why not lend to banks?

If the Federal Funds Rate is money traded back and forth between banks in order to keep their reserve rate current, why not loan money to the bank?



Why not lend to banks?credit check





When you have a CD, you are essentially loaning money to the bank. Anything that pays you interest is loaning your money that in turn is loaned out to someone else. The bank is the middleman coming and going.

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