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Author Topic: How the Bank works to make money?  (Read 1536 times)
EVOS
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July 10, 2018, 11:15:04 PM
 #1

How do you think banks make money, how does a bank make money to pay its employees and business operational?
Does the bank rely solely on interest on loans from banks?
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July 10, 2018, 11:48:30 PM
 #2

The banks have several ways in which they make their money. One of the means are through the sundry charges and charge backs.

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July 11, 2018, 01:11:43 AM
 #3

indeed one of the biggest income banks is from interest but much more bank income apart from interest such as insurance policy, administration fee every month, from auction market, home and vehicle loan financing and many more.
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July 11, 2018, 01:12:57 AM
 #4

I have asked a bank manager once. He told me that the real inflow of money is when people lends money from the bank. The interest of the borrowed that are quite big are the ones they use to pay their employees. When somebody deposits in the bank they got their money addded with interest but at the same time this money can be an asset to the bank should they need to use it for lending.
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July 11, 2018, 01:42:18 AM
 #5

How do you think banks make money, how does a bank make money to pay its employees and business operational?
Does the bank rely solely on interest on loans from banks?
They get income from many ways. Fees, monthly charge, and also they use their customers money then lend it, they take their customers money. But bitcoin is different, users only need to pay transactions fee, and their amount of bitcoin will not decrease because of monthly administration fee.

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July 11, 2018, 02:05:08 AM
 #6

which obviously they collect customers' money by saving, and lend it back to customers with higher interest rates. and they take preventive measures by requiring the use of customer assets as collateral

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July 11, 2018, 03:09:19 AM
 #7

You know, you probably don't even have to look further than a wikipedia article on banking to get this answer.  It's not a real topic of discussion, because the answer is known and there's not a lot to add.

Thus I won't even answer the question, but I'd add that the crypto world has yet to devise a system that could actually compete with banking, nor has banking adopted crypto.  I kind of wonder why the latter is true, but my guess is that it might have to do with anonymity and irreversibly.  I just don't know.  

But as to the former, the only thing I've seen on a large scale was Trendon Shavers and his failed attempt at a banking structure that turned out to be a gigantic ponzi scheme.  It really would be nice if someone figured out a successful model for paying interest on bitcoin deposits--and I'm not talking about POS coins.  That's different and I don't think that's going to work.  If no one uses those coins for anything and just keeps them all in a wallet....that's not a model for anything useful.

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July 11, 2018, 03:22:56 AM
 #8

one of the largest income banks is from interest and profit sharing but there are many more bank profits other than interest, for example from Profit from Unconfirmed Assets, Revenue Per Service, Profit From Investment, Advantages Of Safe Deposit Box Service, and from monthly fee administration fee from the customer is very small but if multiplied by the number of customers it will be a great value.

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July 11, 2018, 03:39:18 AM
 #9

Banks actually use your money to invest right after the moment you put your money into. They are not going to "store" you money. They use your money to make money through investments.
Other incomes could be for lending, banking fees, ATM fees, exchanges,..
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July 11, 2018, 03:44:09 AM
 #10

How do you think banks make money
Through interests, lending and other of their investments.

how does a bank make money to pay its employees and business operational?
We deposit our money to the banks and they are using it for lending to big investors whom they can trust with collateral basically and it runs through the years paying them. That's covering all their operation including salaries and other stuffs. There's also what we call bank charges, when your savings hits below the required balance, you'll be charged.

Does the bank rely solely on interest on loans from banks?
They have other investments and services.

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July 11, 2018, 03:57:05 AM
 #11

How do you think banks make money, how does a bank make money to pay its employees and business operational?
Does the bank rely solely on interest on loans from banks?

I think banks do get their money from their customers. They borrow it and it terms they also get money from those customers who loans from them and add interests.

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July 11, 2018, 04:00:33 AM
 #12

As far as I know, banks generally fall into two main categories: #1 commercial banks and #2 investment banks.

Commercial banks are generally associated with home, business and car loans. They offer wire transfer services, ATM and debit cards and do the general and stereotypical things people generally associate with banking.

Investment banks are a bit different, they are more strongly associated with hedge funds, HFT trading, OTC derivatives and otherwise "creative financing" based methods of earning profits.

Historically, there has been a call for a clear divide and separation of commercial banking from investment banking. There are measures like glass steagall which were devised partly with the intent to prevent investments banks from making investments with deposits from customers associated with their commerical banking wing. These types of measures could contribute towards economic stability and long term prosperity as it could reduce the likelihood of banks being bailed out in the event that their investments turn sour and they lack funds owed to depositors.

Anyways suffice it to say this could be a somewhat neglected topic and most people don't have time to bother with things like this.

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July 11, 2018, 04:33:11 AM
 #13

How do you think banks make money, how does a bank make money to pay its employees and business operational?
Does the bank rely solely on interest on loans from banks?
At some point i saw a documentar regarding money and it was mentiond how the functionality of banks.

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July 11, 2018, 04:35:57 AM
 #14

How do you think banks make money, how does a bank make money to pay its employees and business operational?
Does the bank rely solely on interest on loans from banks?

I think banks do get their money from their customers. They borrow it and it terms they also get money from those customers who loans from them and add interests.
Technically banks used the money of their cutomers to other things that can create money for them and they will just pay their customers a very low interest for that money so basically its all come from the customers. Banks have a huge amount of capital, and becuase of that they are able to sustain their business and grow more through their profit.

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July 11, 2018, 05:33:18 AM
 #15

I have asked a bank manager once. He told me that the real inflow of money is when people lends money from the bank. The interest of the borrowed that are quite big are the ones they use to pay their employees. When somebody deposits in the bank they got their money addded with interest but at the same time this money can be an asset to the bank should they need to use it for lending.
Many circulation is how the banks make money. They have share holders that invest on them which is being used to lend money on other people and give interest from it. Though people are gaining from the savings that they put in the banks there is much higher interest the bank get when they give loans to their members.

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July 11, 2018, 11:21:50 AM
 #16

They take your money with some interest and give loans to other with higher interest. The remainder between interest is the profit the bank made.

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July 11, 2018, 01:01:35 PM
 #17

The main income for banks is net interest. Net interest is the difference between interest received on deposits and interest paid on loans. This source of income is 70-80%. The rest of the profit comes from servicing customer accounts, currency exchange, trading in securities, selling precious bank metals and coins, commissions for issuing loans, issuing cards, issuing cash through a cashier and other services.
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July 11, 2018, 01:25:59 PM
 #18

They use the money of investors, investing in projects, and then they pay interest to them.
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July 11, 2018, 01:35:52 PM
 #19

Banks make money in many ways. They get money from the services they offer, they also get it from bank transaction charges. They also get big loan interests on their clients' loans. That is how they get their income.

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July 11, 2018, 01:43:06 PM
 #20

they take taxes some percent for everyone who is saving. and also they take bank flower some percent to everyone who owes the bank.

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