Match funding is a funding mechanism used by financial institutions, such as banks and credit unions, where they match the amount deposited by their customers, up to a certain limit. This practice is commonly seen in savings accounts and certificates of deposit (CDs).
For example, let's say a bank offers a match funding program on their savings account with a limit of $100. If a customer deposits $50 into their savings account, the bank will match that with an additional $50, bringing the total account balance to $100.
Match funding helps financial institutions attract new customers by offering an incentive to save money. It also encourages customers to save more money, as they know the bank will match their contribution. In addition, match funding can help financial institutions build a more stable deposit base, which can be used to fund loans and other investments.
Overall, match funding is a common practice in the financial industry and can be a useful tool for customers to save more money and for financial institutions to attract and retain customers.
Match Funding
Financial Term
Match funding is a funding mechanism used by financial institutions, such as banks and credit unions, where they match the amount deposited by their customers, up to a certain limit. This practice is commonly seen in savings accounts and certificates of deposit (CDs).
For example, let's say a bank offers a match funding program on their savings account with a limit of $100. If a customer deposits $50 into their savings account, the bank will match that with an additional $50, bringing the total account balance to $100.
Match funding helps financial institutions attract new customers by offering an incentive to save money. It also encourages customers to save more money, as they know the bank will match their contribution. In addition, match funding can help financial institutions build a more stable deposit base, which can be used to fund loans and other investments.
Overall, match funding is a common practice in the financial industry and can be a useful tool for customers to save more money and for financial institutions to attract and retain customers.