How the Bank works to make money?

[tee-rex]

The banking system is really most mystrious of our world because if we research deeply about all the banks in the world it has been in the control of few people so they were controlling all the money of the world so they can create as much as money they want and can pay the employees.

That "few people" is called the government. I don't see anything mysterious about that. People just like to think it is. There are other reasons as to why the government have to print more money. One is to replace the old ones that have been worn out. We are using money on a day-to-day basis. It's just paper and paper can break easily. Second one is the economy is actually growing and we need more money printed. Transactions aren't always done digitally and most transactions are still done with paper money.

Just like other things, printing a little bit more of money isn't bad at all and doesn't result to inflation. But too much of something is always bad. Too much printing of money will result to inflation which affects the economy of the whole country and its the people who experience such consequences the most.

The governments not printing any money only the central Banks from the respective country is printing all the money but which is not controlled by their governments as per the articles I have read on the internet.

Don't believe everything what's written on the Internet. Your note about a central bank not being a part of the government may technically be true in certain cases, but even when it is true, this is irrelevant as both central banks and governments are all part of the establishment, or the ruling elite, if you please. If you choose to disagree, then I can just say that central banks themselves aren't printing anything. If you mean paper money and coins, they are printed and minted by specialized facilities which are separate companies or corporations. If you mean cashless fiat (so-called electronic, or digital, money), it is mostly created by commercial banks via credit, not by a central bank on its own.

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[jrrsparkles]

The banking system is really most mystrious of our world because if we research deeply about all the banks in the world it has been in the control of few people so they were controlling all the money of the world so they can create as much as money they want and can pay the employees.

That "few people" is called the government. I don't see anything mysterious about that. People just like to think it is. There are other reasons as to why the government have to print more money. One is to replace the old ones that have been worn out. We are using money on a day-to-day basis. It's just paper and paper can break easily. Second one is the economy is actually growing and we need more money printed. Transactions aren't always done digitally and most transactions are still done with paper money.

Just like other things, printing a little bit more of money isn't bad at all and doesn't result to inflation. But too much of something is always bad. Too much printing of money will result to inflation which affects the economy of the whole country and its the people who experience such consequences the most.

The governments not printing any money only the central Banks from the respective country is printing all the money but which is not controlled by their governments as per the articles I have read on the internet.

Don't believe everything what's written on the Internet. Your note about a central bank not being a part of the government may technically be true in certain cases, but even when it is true, this is irrelevant as both central banks and governments are all part of the establishment, or the ruling elite, if you please. If you choose to disagree, then I can just say that central banks themselves aren't printing anything. If you mean paper money and coins, they are printed and minted by specialized facilities which are separate companies or corporations. If you mean cashless fiat (so-called electronic, or digital, money), it is mostly created by commercial banks via credit, not by a central bank on its own.

Okay,I agree that central banks and the governments were part of something but I have a question even since from my birth on what basis the governments were printing the money? It used to be how much Gold they were holding in the old days but now,no one knows it is still private!

[tee-rex]

The banking system is really most mystrious of our world because if we research deeply about all the banks in the world it has been in the control of few people so they were controlling all the money of the world so they can create as much as money they want and can pay the employees.

That "few people" is called the government. I don't see anything mysterious about that. People just like to think it is. There are other reasons as to why the government have to print more money. One is to replace the old ones that have been worn out. We are using money on a day-to-day basis. It's just paper and paper can break easily. Second one is the economy is actually growing and we need more money printed. Transactions aren't always done digitally and most transactions are still done with paper money.

Just like other things, printing a little bit more of money isn't bad at all and doesn't result to inflation. But too much of something is always bad. Too much printing of money will result to inflation which affects the economy of the whole country and its the people who experience such consequences the most.

The governments not printing any money only the central Banks from the respective country is printing all the money but which is not controlled by their governments as per the articles I have read on the internet.

Don't believe everything what's written on the Internet. Your note about a central bank not being a part of the government may technically be true in certain cases, but even when it is true, this is irrelevant as both central banks and governments are all part of the establishment, or the ruling elite, if you please. If you choose to disagree, then I can just say that central banks themselves aren't printing anything. If you mean paper money and coins, they are printed and minted by specialized facilities which are separate companies or corporations. If you mean cashless fiat (so-called electronic, or digital, money), it is mostly created by commercial banks via credit, not by a central bank on its own.

Okay,I agree that central banks and the governments were part of something but I have a question even since from my birth on what basis the governments were printing the money? It used to be how much Gold they were holding in the old days but now,no one knows it is still private!

As I explained in my post, central banks (or governments) typically don't print money themselves unless we talk about coins and paper money, of course. But these forms of money make up only a small fraction of all money (or what can be used as money) circulating in the economy. The rest is digital, cashless money, and this money gets created (as well as destroyed, for that matter) based on the economic activity in the country.

For example, when there is a boom, companies expand their production using the money borrowed from commercial banks. That's basically how money gets created nowadays. Such money, credit money, is called endogenous money. You have likely been told or even taught in school or college that banks need deposits to give credits, but you have been misinformed. This is not how banks work today. Banks don't need deposits for credits, and money literally gets created out of thin air, though limited by the needs of an economy via credit demand.

This process is very well established, time-tested, and there is nothing "no one knows" about it.

[adefirman98]

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?

Fee based income (FBI)
The FBI is the income derived from charging fees for services provided by the bank. The simplest example of the FBI is the monthly administration fee that is charged to the savings and debit card accounts and the annual fee of the credit card.

[sino22]

Banks make money from interest income Interest income is obtained from customers who borrow funds in the form of loans, Gains from spot and derivative transactions, Dividends

[s.mahmood]

Bank income money by several way.Bank land customers money to customers amd get interest. Bank get charge from customers. Although bank gives some interest tp customers but it is sp little.

[realcrypto]

One of the major source bank make money is interest gotten from loan, Banks also make money massively from the unnecessary charges on their costumer  especially on domiciliary account.

[rugbyma]

The 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 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.

[ngano ba]

The works of the banks are to received deposits from clients and this money are used to generate the income for interest so that it will be given back to the investors for their interest in their deposit investment ,so the has offer loans like cars ,housing ,educational and many others ,lendind money ,mortgages of lotscand properties in order to make money out of this offerrings to the customers and clients.

[paynercash]

The works of the banks are to received deposits from clients and this money are used to generate the income for interest so that it will be given back to the investors for their interest in their deposit investment ,so the has offer loans like cars ,housing ,educational and many others ,lendind money ,mortgages of lotscand properties in order to make money out of this offerrings to the customers and clients.

The banks offer high interest rates, receive low returns, and spend a great deal of money on other high-yielding investments. The way in which the world's big banks operate and receive profits is a long-term process.

[Ucy]

I once read somewhere that their profits come mostly from fractional reserve banking. It is a practice of leading money deposited by customers to businesses and making tons of money from interest. I don't know how correct or true it is.
There could be other ways they make money such as investments, foreign exchange trading, etc

[reyanshbasu]

I haven't worked in a bank before but I believe that their income doesn't only come from interest on loans. I think they also invest their client's money in other sources of income. Like trading stocks or buying properties and they will sell them in a short period of time with a higher price.

[Baggong]

Banks are financial institutions that always give loans to debtors, they can get a greater interest than customers who put money so they get a margin, this is what makes banks always get profit.

[crwth]

I once read somewhere that their profits come mostly from fractional reserve banking. It is a practice of leading money deposited by customers to businesses and making tons of money from interest. I don't know how correct or true it is.
There could be other ways they make money such as investments, foreign exchange trading, etc

I think they use the funds deposited in the bank by a person or a group of people to foreign exchange trading. They are collecting a lot of money to either be traded or invest in people who ask for loans etc. It's just that easy (in the part of the bank) Because the bank won't have to make much effort especially if the bank has already a reputation to be a great bank. The money just keeps on coming.

[Bumblecoin]

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 no, if that will be the case, banks will not get that so rich. I guess they invested the money and from there they gain a lot of profit. The more people invest in their bank, the richier they will get.

[slyfox]

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 not only rely on loaning money to the public to make profits, however most of their money is made through credit cards that have great interest rates, but another way in which they get a lot of money is that they offer investing packages in which they offer you some of the profits but as you may guess they keep most of those profits to themselves, so you take all the risk of losing money and yet they get most of the profits.

[Muzika]

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 not only rely on loaning money to the public to make profits, however most of their money is made through credit cards that have great interest rates, but another way in which they get a lot of money is that they offer investing packages in which they offer you some of the profits but as you may guess they keep most of those profits to themselves, so you take all the risk of losing money and yet they get most of the profits.

they really can make a money thru interest rate specially for the credits and loans also with that they will invest it in the stock market they really used the money of the people specially the depositors to do investment that is why they can lend money to the people.

[dankboner83]

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?

That is only one small source of income.
The banks invest your money immediately right after you put money into savings. They never keep a lot of money. They invest everything and make money out of the investments.

[tee-rex]

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 not only rely on loaning money to the public to make profits, however most of their money is made through credit cards that have great interest rates, but another way in which they get a lot of money is that they offer investing packages in which they offer you some of the profits but as you may guess they keep most of those profits to themselves, so you take all the risk of losing money and yet they get most of the profits.

Credit cards are only a different form of credit, so it is the same credit only in the form of credit line, where you can borrow as much as you need within the limits set by the bank. Some banks do offer services of trust management when they manage your money on your behalf, but this is not their business. For these purpose specifically banks and bank corporations often establish investment firms since it is an entirely different business which has little to do with banking operations as such.

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?

That is only one small source of income.
The banks invest your money immediately right after you put money into savings. They never keep a lot of money. They invest everything and make money out of the investments.

And they can't keep a lot of money in the bank itself as they have limits imposed by their governing body (central bank). They should keep the money in a central bank account, and the central banks pays them some interest on these balances. To conclude, it can be said that banks get paid interest on any funds they might have (even on deposits which they lend out immediately).

[Charlessy]

One of the major source bank make money is interest gotten from loan, Banks also make money massively from the unnecessary charges on their costumer  especially on domiciliary account.

Bank as a financial institution is a place to store and deposit, then the existing funds are loaned to customers with a greater interest and the difference in interest is the bank's profit. Then there is income from transfer transactions between customers or between banks. Benefits are used for operational costs and paying employees. In addition there are also banks that rent deposit boxes for storage of valuables.