Can banks invest FDIC insured deposits in investment grade bonds?
Can banks invest FDIC insured deposits in investment grade bonds? If so, are there any restrictions on the percentage of deposits that can be invested in bonds?
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Answer by Net Advisor™
Banks take all FDIC insured deposits and use that money to invest in a variety of things which may include securities, bonds, etc, however their most profitable investments is by loaning that money back out in the form of credit cards, where cardholders guarantee to pay them 12-30%+ a year return.
Other investments include loans such as residential and commercial mortgages, which has not worked out too well.
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Summer Reception - Green Investment Bank debate - 30 June 2010
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Fiona Harvey, environment correspondent, Financial Times
Orignal From: Can banks invest FDIC insured deposits in investment grade bonds? and Summer Reception - Green Investment Bank debate - 30 June 2010
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