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Author Topic: How the Bank works to make money?  (Read 1177 times)
samcrypto
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September 11, 2018, 11:55:03 PM
 #241

Banks has so many ways to earn profit, not just from the interest but it can also from the investment they have like in real estate, stocks and so on. Banks will always find ways to make more money using your savings with them. Its sad that banks are just providing small amount of interest to their customers.

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September 12, 2018, 12:25:11 AM
 #242

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?
bank make it from people that store their money, than the bank play it money to pay their worker and developing their company. so if all people that have money in some bank, and they take all money, all of them, im sure they cant give it back.
maybe loan just for additional income for them.

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September 12, 2018, 12:37:32 AM
 #243

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?

The main source of their earning is came from the interest of their loans in which they have various type of it which is Infrastructural loan project is their biggest earn as it was involved in millions to billions of money. Sometimes the banks will invest in a certain project especially those that faciliated by the government that need funding.

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September 12, 2018, 01:29:11 AM
 #244

Well it is simple. Banks well offer a loan program that could be payable with interest and the money made from this came from your deposits.
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September 12, 2018, 03:51:09 AM
 #245

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?
  banks basically make money by lending money at rates higher than the cost of the money they lend. More specifically, banks collect interest on loans and interest payments from the debt securities they own, and pay interest on deposits, CDs, and short-term borrowings. The difference is known as the "spread," or the net interest income, and when that net interest income is divided by the bank's earning assets, it is known as the net interest margin.

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September 12, 2018, 04:00:46 AM
 #246

as I know, banks make money based on the gold they have. so they spread money based on the intrinsic value they have, so that the money spent has a sale and purchase price. maybe not just gold, but other valuable differences can be an intrinsic value on money.

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September 12, 2018, 04:05:04 AM
 #247

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?
the largest source by far of funds for banks is deposits; money that account holders entrust to the bank for safekeeping and use in future transactions, as well as modest amounts of interest. Generally referred to as "core deposits," these are typically the checking and savings accounts that so many people currently have.
In most cases, these deposits have very short terms. While people will typically maintain accounts for years at a time with a particular bank, the customer reserves the right to withdraw the full amount at any time. Customers have the option to withdraw money upon demand and the balances are fully insured, up to $250,000, therefore, banks do not have to pay much for this money. Many banks pay no interest at all on checking account balances, or at least pay very little, and pay interest rates for savings accounts that are well below U.S. Treasury bond rates.

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September 12, 2018, 04:15:31 AM
 #248

yes and they lend the money to other people with small interest but very big capital, they invest it in the stock market and buy and sell properties
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September 12, 2018, 05:45:29 AM
 #249

With a concept they call fractional reserve banking, banks practically create loans from money they do not have, debt out of thing air, they can make 100$ loans from deposit of 1$ you make and s charge interest on it

Why do people still stick to the idea of FRB if it had died so many years ago? FRB is no longer relevant, not with a centralized banking system based on fiat. This is a common misconception that banks lend money out of deposits from I don't know how many years ago. It can be said that banks can create money right out of thin air, they don't need deposits for that. There is indeed a limit on how much credit banks can create, but this limit in most cases doesn't depend on how much money they have in deposits. In some countries, there are no reserve requirements for banks at all, though this doesn't mean that they can create unlimited credit, of course. The system today works in a completely different manner than some 100 years ago, but people are still mostly unaware of it and repeat the same old garbage about FRB.


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September 15, 2018, 05:13:08 PM
 #250

With a concept they call fractional reserve banking, banks practically create loans from money they do not have, debt out of thing air, they can make 100$ loans from deposit of 1$ you make and s charge interest on it
That is their biggest money maker not only they get to make money out of the money that you let with them so they keep it safe, which in my opinion is an abuse, but not only that thanks to fractional reserve banking they can loan money that they do not even have, this is why banks are so powerful because they are allowed to print money as if they were a government and they are responsible for a great deal of the inflation of the currency supply in a country.


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September 18, 2018, 07:40:57 AM
 #251

money is like a commodity, buy it cheaper in the Central Bank and sell it more expensive
There is a concept called the credit creation. Banks earn money by applying this concept and advancing a part of the money that is deposited by the costumers in their bank accounts. It means banks do business with your money and earn by using your money. The loans that the banks advances to another person are expected to be returned in the given time period along with additional amount which is called the cost of loan or the interest rate.

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