{"id":17479,"date":"2019-09-03T13:37:57","date_gmt":"2019-09-03T12:37:57","guid":{"rendered":"https:\/\/traders-paradise.com\/?p=17479"},"modified":"2020-07-07T15:16:09","modified_gmt":"2020-07-07T14:16:09","slug":"the-low-interest-rates","status":"publish","type":"post","link":"https:\/\/traders-paradise.com\/magazine\/2019\/09\/the-low-interest-rates\/","title":{"rendered":"The Low-Interest Rates Could Lead You to Great Earnings"},"content":{"rendered":"

3 min read<\/em><\/p>\n

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When interest rates are low you may think:\u00a0 Oh, what a good opportunity. Loans are cheaper, banks or and peer to peer sites will fight for loan clients. Yes, at some point of view and for a short time it is favorable.<\/span><\/p>\n

But on the other side, the low-interest rate means lowering returns for lenders<\/a>. If interest rates are low for a long time, where is the benefit for lenders? That is the very clear relationship between demand and supply. Low-interest rates can damage lenders, and the borrowers can be damaged too because borrowing money becomes difficult.<\/span><\/p>\n

In periods when the interest rate is low, banks are in a difficult situation<\/a>. They don’t have a strong deposit base, the income from loans is lower too which causes the banks to don’t want to take a risk by giving cheap loans to borrowers with the lower credit rating.<\/span><\/p>\n

And here we come to the point. It is difficult to finance<\/a>, for example, small businesses, and investing becomes more difficult too. But not impossible yet.<\/span><\/p>\n

Low-interest rates inhibit investors from putting money in savings accounts. They rather use the funds to pay their debts or use their money to invest in shares or buy some property.\u00a0<\/span><\/p>\n

For example, if the interest rate on deposit is about 1%, why would you put your money on savings? The better choice is to buy shares, the return is bigger.<\/span><\/p>\n

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