MBH is exactly right. I just want to explain it a bit further.

If the bank loans you $100,000 for 30 years at 5% interest, then interest rates in general go to 10% (heaven forbid), then they have tied up 100,000 bucks for thirty years earning half the interest rate they might be earning.

So in general, when you get a loan, the longer the term, the higher the rate.

When you LOAN banks money-(say CD's) it works the other way- the longer you let them have your money, the higher the rate they pay you.

Although the "spread" on what they pay you on a cd, and what you pay them when you borrow is what is called their margin of profit (after their expenses and loan losses).

That spread is now at record highs-so expect bank profits to soar over the next two years. If you have money to invest a good bank stock, or mutual fund invested in bank stocks, would be a good, (although speculative) investment right now.....

This is not an endorsement to go buy any stock, and I am not a broker, and have very little bank stock right now.....It is just they have an earning machine going. Now the ones that have a ton of bad loans out, will have more trouble than the ones that didn't go crazy over the last 5 years with derivatives-but that is a whole 'nother story!