Question

Exe Suppore e to Saings lo cal bak a cartifegabl pe int Eoxplain why at I0am throte hd iale lkam the rate he mtereft 7rate elrtshecates Lusen Car Loans bank and ae fr mext indi hdual to thi whe psters Car l0an

Answer 1

It will be preferred to go for the certificate of deposits, paying a lower rate of interest than offering a loan that pays higher rate of interests, because there is a  high level of risk associated with the loan issued to the individuals. There is a high risk of default as well as lack of regulating body that can take care of the interests of the lender person. In contrast to it, when a certificate of deposit is purchased for investments, then it is less riskier and assurance of return is very high. Besides, regulatory agencies also protect the interests of the investors in this case. Hence, it is always preferred to by certificate of deposits over the loans issued to the person.