Answer:
1%
Explanation:
One of the way through which banks make profit is by investing in some other financial institutions. The interest on this type of deposit forms a major component of the banks' profit .
We also need to know that the money invested by banks are the deposit made by the banks customers , who in return is also expecting a certain amount as interest on his deposit.
Based on this explanation , a bank will offer a lower interest rate compared to the financial institution's interest in order to make its share of the of profit on its customers money invested in other financial institution.
