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peggys

Resolved Question Bookmark and Share

How do banks profit by keeping money for other people?

I've honestly never thought about it, and haven't had many dealings with banks to learn the answer.

949 day(s) ago

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DianeJ

Best Answer

When you make a deposit to the bank they don't just keep it locked up in a vault. They make their money by lending out your money to others and collecting interest off of those loans. They make it worthwhile to the depositer by providing a safe place for their money and by paying a small amount of interest on the deposit.

949 day ago

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Other Answers (3)

BillGill 		They charge people when they take money out of ATMs and also charge interest when people get a loan.

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AnandPatwada 		They let people borrow that money. They make money from the finance charges.

Posted 949 days ago

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KathySimons 		They DON'T profit by KEEPING money. The get SOME of their profit by LOANING money. the 'open secret' in the industry is this has not been the primary income source for years. MOST of their income comes from FEES.

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