While searching for the best interest rate on a certificate of deposit (CD), Chet noted that two online banks had better rates than traditional banks that had physical presence in his town. A logical reason why these banks were offering higher interest for depositors is Multiple Choice the traditional banks have more customers, which translates into more expenses per customer. the traditional banks are not making as many home loans as they did in the past, which decreases their profits. online banking may pay higher interest rates according to federal banking rules. online banks do not have the overhead and labor costs that traditional banks must cover. With expenses at a minimum, they can pass along that savings to depositors