dollar cost of interest paid or accrued on funds acquired from various sources within a bank, and borrowed fundsacquired from other banks, including time deposits, advances at the Federal Reserve discount windowFederal Funds purchased, and Eurodollar deposits. A bank may use its internal cost of funds in pricing the loans it makes.
interest cost paid by a financial institution for the use of money. In the banking and savings and loan industry, the cost of funds is the amount of interest the bank must pay on money market accounts, passbook savings accounts, CDs, and other liabilities.
interest cost paid by a financial institution for the use of money. Brokerage firms' cost of funds are comprised of the total interest expense to carry an inventory of stocks and bonds. In the banking and savings and loan industry, the cost of funds is the amount of interest the bank must pay on money market accounts, passbooks, CDs, and other liabilities. Many adjustable rate mortgage loans are tied to a cost-of-funds index, which rises and falls in line with the banks' interest expenses.
