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→Interest rates paid by banks on deposits: risk of bank failure
Interest rates can be either fixed ([[fixed rates]]) or they can change ([[adjustable rates]]). Rates on [[savings]] and [[checking]] accounts in a bank will usually change over time whereas a [[certificate of deposit]] will usually have a fixed rate for the life of the contract.
Interest rates can be either fixed ([[fixed rates]]) or they can change ([[adjustable rates]]). Rates on [[savings]] and [[checking]] accounts in a bank will usually change over time whereas a [[certificate of deposit]] will usually have a fixed rate for the life of the contract.
Because federal deposit insurance guarantees that deposits up to a specified limit will not be lost in the event of a bank failure, the interest rate paid by banks does not compensate for that risk and is lower than the interest rate offered by non-insured sources, such as money market funds or corporate bonds.
==References==
==References==