Interest Rates Canada

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How do interest rates work in Canada?

Rounding it up

  • Understanding interest rates begins at the Bank of Canada, which controls the policy interest rate, or the interest Canadian banks charge each other for overnight loans.

  • Changes in the policy interest rate impact the way banks apply interest on credit they extend to a consumer, like a credit card or mortgage.

  • A lower policy interest rate usually means the banks are setting a lower prime rate on mortgages, but it also means your savings could take a hit.

  • A commercial bank’s interest rate is also affected by the strength of the Canadian dollar, what the bank has in assets, and more.

4 min read

Emily Keeler
#interest#interest rates#banks#credit

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