Interest rate has become a familiar term now a days. Almost every individual is seeking the best interest rates offered by banks or firms. This thing was introduced for the first time in banking sector. Banks offered there customers to deposit their assets in cash form in the bank and get interest on that wealth. The amount of interest varies from bank to bank. Some banks offer high interest rates for their customers and some offer less. This was even a safe investment in a sense that your assets become secure. Bank is responsible of the security of your assets and you get profit while sitting at your home at the end of the month.
As there is a risk factor in every business project. You are not sure about any project that it will give you profit or not or how much profit it can return you. This is a great opportunity in a sense that you have a predefined profit. You just need is to deposit your money and get the interest while sitting at your home every month. Your bank is responsible of all the ups and downs. All you need is to deposit your wealth and then get your hands off of every thing. Bank must have to pay that predefined interest that it offered you.
Business persons are always attracted to such incentives. If they find that the interest rates are higher then the expected profit of their business project they for sure will deposit their money in bank because their wealth is also in safe hands and they are also sure about the fact that they will earn a great income out of it. Every businessman prefers a secure, reliable and more profitable investment so he will for sure go for this opportunity. Mostly business persons and nowadays general public too is attracted towards the interest rates set by the central bank of any country. The reason behind this is that central banks always set the best interest rates of all because it is dealing with all the economic issues of the country and all the banks working in that particular country are being monitored by the central bank of that country.
Central banks always try to lessen the supply of the currency due to which it becomes expensive. This is the immediate effect of interest rate on the market.