2006-10-19 14:39:25 · 4 answers · asked by hdwong58 3 in Business & Finance ➔ Personal Finance
I fought this battle when I was on the board of directors with the cedit union. No one believed me. Had to ask the teller to create a dummy loan and a dummy savings account. I proved that we could charge one percent less interest than we paid and still make money. Savings is compounded quarterly. Loans are compounded daily. Its a huge difference. The magic of compounding will make you rich or keep you poor. Just depends on which side of the equation your on. There are those who understand interest and the rest are paying it to them.
2006-10-19 18:14:05 · answer #1 · answered by john d 3 · 0⤊ 0⤋
You would think that is true, but most loans are compounded daily and savings accounts are compounded monthly. The loan costs more than the savings will accumulate.
Unfortunately, banks are in it for their profit, not your profit.
Take care,
Troy
2006-10-19 21:47:29 · answer #2 · answered by tiuliucci 6 · 0⤊ 0⤋
Taxes might screw it up, too. Not all loan interest is deductible, not all savings returns are taxable.
2006-10-19 22:29:55 · answer #3 · answered by Jim H 3 · 0⤊ 0⤋
not if you have an APR on the loan!
2006-10-23 18:46:31 · answer #4 · answered by worm 3 · 0⤊ 0⤋