i use WAMU and they dont charge the customer any fees at all, so how do they make money? from Businesses? Where does a large part of their profit come from?
2006-08-31 01:12:41 · 12 answers · asked by Stacy R 2 in Business & Finance ➔ Other - Business & Finance
Banks make a spread on the money they take in on deposit and then loan to other people. You deposit money in an account and are paid no interest or say 2%. The bank loans the money in a credit card at 17%... the difference is gross profit. Banks also rent safe deposit boxes, earn fees for servicing mortgage loans, fees and commissions for investment products, etc...
WAMU (and others) use the "no fee" checking to attract low cost retail core deposits to fund their loans.
2006-08-31 01:21:09 · answer #1 · answered by Adios 5 · 0⤊ 0⤋
2
2016-07-21 19:13:56 · answer #2 · answered by Margie 3 · 0⤊ 0⤋
In simple terms Banks make their money from lending out money to consumers and businesses in need of loans by using depositor funds such as savings accounts and checking accounts. The way the bank makes a profit is by charging an interest rate for those seeking loans. The bank offers free checking to induce more depositing customers so they can in return lend out more money ultimately making more profits.
2006-08-31 01:21:32 · answer #3 · answered by gjjr2004 3 · 0⤊ 0⤋
from loaning out your money to others...
Just because you keep money at the bank doesn't mean they lock it up for you. They put it to work loaning it to small businesses and other customers...
But because depositors need their money from time to time they have to keep part of it in reserve to be able to pay out withdrawal requests.. The percentage they have to hold onto in reserve varies depending on the type of account... for CDs since it is harder for you to make a withdrawal, their reserve requirements are lower and therefore they can use more of the money and be able to pay you a higher interest rate....
2006-08-31 01:21:29 · answer #4 · answered by Andy FF1,2,CrTr,4,5,6,7,8,9,10 5 · 0⤊ 0⤋
Yes, it's called a wire transfer. Your friends' banks will probably charge them for sending out the wire transfers and your bank will charge you for each wire transfer that you recieve. Call your bank and ask them what information will be needed for your friends' to wire money into your account.
2016-03-17 05:21:24 · answer #5 · answered by Anonymous · 0⤊ 0⤋
they charge you a lot of money to borrow from them, and dont give you as much interest if u lend money to them(this is done byu storing money in your bank account) HOWEVER this is a very risky way of making a living, because they always lend more money than they have...
2006-08-31 01:21:52 · answer #6 · answered by tim n 1 · 0⤊ 0⤋
Banks make money through interest that they charge you for holding your money. Also, if you have a checking account, and you over drawl, they charge you for that. If you dont have "x" amount in your account, they can charge you for that as well.
2006-08-31 01:21:37 · answer #7 · answered by Island_Girl 2 · 0⤊ 0⤋
banks make money when people borrow money from them. they charge interest.
2006-08-31 01:18:40 · answer #8 · answered by Anonymous · 0⤊ 0⤋
They lend money at a higher interest rate than they pay on deposits. The gap is the profit margin.
2006-08-31 01:22:18 · answer #9 · answered by foogill 4 · 0⤊ 0⤋
My charging ourtageous amounts of interest and bank charges. Trust me they make billions
2006-08-31 01:18:30 · answer #10 · answered by Anonymous · 1⤊ 1⤋