Cost Of Funds

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Dictionary Says

Definition of 'Cost Of Funds'

The interest rate paid by financial institutions for the funds that they deploy in their business. The cost of funds is one of the most important input costs for a financial institution, since a lower cost will generate better returns when the funds are deployed in the form of short-term and long-term loans to borrowers. The spread between the cost of funds and the interest rate charged to borrowers represents one of the main sources of profit for most financial institutions.
Investopedia Says

Investopedia explains 'Cost Of Funds'

For lenders such as banks and credit unions, cost of funds is determined by the interest rate paid to depositors on financial products including savings accounts and time deposits. Although the term cost of funds usually refers to financial institutions, most corporations that rely on borrowing are impacted by the costs they must incur to gain access to capital.
Search results for

'Cost Of Funds'

  • Using ETFs To Build A Cost-Effective Portfolio

    http://www.investopedia.com/articles/exchangetradedfunds/09/etfs-and-mutual-funds.asp
    ... Because ETFs trade like stocks, there is a transaction cost associated with trading
    them, but unlike with mutual funds it doesn't increase with amount invested ...

  • Hedging With ETFs: A Cost-Effective Alternative

    http://www.investopedia.com/articles/exchangetradedfunds/11/benefits-etfs-hedging.asp
    ... or held at cost. Now that ETFs have entered the arena, investors can easily hedge
    long non-US investments by purchasing corresponding amounts of funds take a ...

  • The Future Of Mutual Funds

    http://www.investopedia.com/articles/mutualfund/10/future-mutual-funds.asp
    ... held. In addition to A-shares, ETFs offer another low-cost investment
    alternative that are fiercely competing with mutual funds. (If ...

  • Don't Lose Your Shirt On Mutual Fund Sales

    http://www.investopedia.com/articles/mutualfund/cost-basis-mutual-funds.asp
    ... cannot change your method to another cost-basis method without the approval of the
    IRS. However, you can select different methods for other funds you may own. ...

  • The Cost Of Ignoring Termites - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0911/The-Cost-Of-Ignoring-Termites.aspx
    ... The Cost Of Ignoring Termites. Posted ... dissipate. Depending on the size of the
    house, the procedure itself can cost between $1,500 and $4,000. ...

  • When Wholesale Funding Goes Bad

    http://www.investopedia.com/articles/economics/09/when-wholesale-funding-goes-bad.asp
    ... Your cost of funds should be lower than the yield you earn on your assets (loans).
    Any other scenario is unprofitable and not sustainable. ...

  • Hedge Funds: Higher Returns Or Just High Fees?

    http://www.investopedia.com/articles/03/121003.asp
    ... The biggest disadvantage is cost, because these funds create a double-fee
    structure. Typically, you pay a management fee (and maybe ...

  • Using Mutual Funds To Profit From Market Dips

    http://www.investopedia.com/articles/mutualfund/07/against_the_market.asp
    ... Will never cost you more than your initial investment; Can be owned by your retirement
    account. Conclusion Reverse market funds can reduce your exposure to the ...

  • Financial Funds Provide Diversity ... And Risk

    http://www.investopedia.com/articles/mutualfund/08/sector-fund-financial.asp
    ... Morningstar stipulates that sector funds (in any category) tend to cost more than
    other funds because they often lack the asset base that is found in ...

  • Building An All-ETF Portfolio

    http://www.investopedia.com/articles/exchangetradedfunds/11/building-an-etf-portfolio.asp
    ... This often makes ETFs a better alternative to actively managed, high cost mutual
    funds, because the odds of picking a mutual fund that will beat the passive ...

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