Non Computer Question.
Why don't they pay more interest to savers? I've asked around but have yet to get an answer that makes sense to me. Any economics gurus out there who can explain in simple terms in a few words?
How did financial institutions - banks, building societies etc. - get money IN to lend it OUT to borrowers? Some of it came from Savers who have spare cash to deposit somewhere. To encourage this, they used to pay interest on your savings. Then they'd get your regular spare cash or even your nest-egg, and they'd lend it out to people who want to borrow for bank loans and/or mortgages.
Now, and for the last year or so, interest rates to savers have typically been 0.01%. i.e., for every pound you put in, you get a penny back, which is risible. This pertains nearly everywhere. (Institutions offering higher rates of interest have equally risible terms and conditions, I've checked.)
There is nowhere to put spare cash unless you want to have it tied up and can't get at it!
The question is, WHY don't they pay more interest to savers, to get money IN so that they can lend it OUT?
Answers on a postcard please. In the meantime, spare cash is sitting in the current account and spread around various places in case any of them go bust.........
