2007-02-04 18:56:17 · 8 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
Banks make money by making loans and charging interest. They use the money deposited by people in savings and checking accounts for this purpose. A bank's size is basically the total of all the money deposited there. That money is not sitting in a vault somewhere - as much of it as possible is loaned out. One way to get people to deposit more money is to pay interest or higher interest than their competitors - but they obviously must pay less interest than they charge on their loans!
2007-02-04 22:47:34 · answer #1 · answered by David S 2 · 1⤊ 0⤋
Banks make money by, first having a big capital which will be cycled to many people by loans. On those loans they have interest which will be the profit of the bank.
2007-02-05 02:59:06 · answer #2 · answered by Michael R 1 · 1⤊ 0⤋
Traditionally, Banks make money by using depositors money to give out loan with a higher interest. Now, Banks also invest in other industries such as property, and Banks also sell other products such as Insurance.
2007-02-05 03:03:24 · answer #3 · answered by Tan D 7 · 1⤊ 0⤋
3-6-3 rule.
Take in deposits at 3%, loan that same money out at 6%, be on the golf course by 3pm.
2007-02-05 12:50:23 · answer #4 · answered by Quixotic 3 · 0⤊ 0⤋
They lend money at ridiculas interest rates, 2 points
2007-02-05 02:58:47 · answer #5 · answered by Anonymous · 0⤊ 0⤋
By charging bounced check fees, some charge to start a checking account, some charge interest...there's lots of ways.
2007-02-05 02:59:21 · answer #6 · answered by manders030405 2 · 1⤊ 0⤋
Interest on loans they give out and monthly service fees.
2007-02-05 02:58:38 · answer #7 · answered by LS 4 · 2⤊ 0⤋
by ripping people off.
2007-02-05 02:57:52 · answer #8 · answered by Anonymous · 0⤊ 1⤋