The bank is when , it also has to pay some interest, that interest rate is called benchmark rate. It is the lowest interest rate which the investor accepts for a non treasury investment. It is also known as base interest rate.
But the interest rate fluctuates, when there are a wide variety of pressures from surrounding. This rate is usually set by the Federal Reserve in the United States.
But most people use the interest rate which is set by the Central banks.
The benchmark rates are usually used by banks and other lenders, so could determine the interest rates for their financial products, like , car loan, and . The bank also uses the benchmark rate to determine the prime rate. Prime rate is the lowest interest rate which the banks offer to their customers.
This prime rate is popular in Canada for benchmark lending. It is made to help people to recover from predatory lending.....
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