CUET Preparation Today
The interest rate paid by the banks to depositors is _______ than the rate charged from the borrowers. Which of the following options suits best in the above blank? |
Lower Higher Equal Sometimes higher, sometimes lower |
Lower |
The correct answer is Option 1:Lower The interest rate paid by banks to depositors is typically lower than the rate charged from borrowers. This difference, known as the spread, represents the profit margin for banks and covers their operational costs. Banks earn from the difference between the interest rates they offer on deposits and those they charge on loans. |
