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Author Topic: How the Bank works to make money?  (Read 2315 times)
marcbitcoins
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September 12, 2018, 12:37:32 AM
 #241

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
 #242

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
 #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?
  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
 #244

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
 #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?
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
 #246

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
 #247

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
 #248

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
 #249

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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September 19, 2018, 10:04:40 PM
 #250

The banking sector can said to be the intermediary between  lenders and borrowers.
The banks receive  funds from lenders at a lower interest rate.... let's say 0.5% per annum  and they lend the funds to borrowers at a high interest rate if maybe 15-30.% per annum .
Thats how they make their money.
This is a very good explanation about how it works banks are just a middle man, and while we have been able to get them out of the equation when it comes to transfering our money from one side of the world to the other thanks to bitcoin and other cryptocurrencies we still have to figure out how to take them out of the equation when it comes to lending.
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September 19, 2018, 11:44:07 PM
 #251

Banks are used as stores to keep and protect money, and they use this money which they know we gaurd jealousy to trade and make profit while at it. So when individuals deposit money they use some part of the deposits to trade and make profit while keep ur money intact.
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September 25, 2018, 06:14:49 AM
 #252

Banks are used as stores to keep and protect money, and they use this money which they know we gaurd jealousy to trade and make profit while at it. So when individuals deposit money they use some part of the deposits to trade and make profit while keep ur money intact.
It is true that banks can use money from accounts in order to trade with it but they can not do this always because it is illegal to use our money if we want to keep it safe in our account. The visible way of making money is in terms of transaction costs and interest rates etc, banks cut transaction costs on different currencies have different rates so this is the visible way of making money.
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September 25, 2018, 06:41:39 AM
 #253

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.

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September 25, 2018, 07:08:28 AM
 #254

Bank is an institute that works on save people's money,sending and receiving from one to another place.It make money by invest in high rate than receive in a low rate from client.

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September 25, 2018, 07:41:47 AM
 #255

in my opinion, banks benefit from the services they provide to their customers, such as services in lending where they provide affordable interest in each installment, that's one of the ways banks get money, besides that there are many more ways for banks to earn money

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October 10, 2018, 01:50:34 PM
 #256

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.

Absolutely banks get profits from many ways and I think that the major income derives from banks collect interest on loans and interest payments from the debt securities they own, and pay interest on deposits, CDs, and short-term borrowings. Obviously it depends on the number of people ( supply)in order that they can operate or survive the work safely. Although compare to digital currency, the fee everyone has to pay for bank is quite bigger than crypto. However, people like to use a tool which is much safer, they tend to support bank.

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October 10, 2018, 02:22:20 PM
 #257

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?
it is true, the bank's main income is from interest, but in various ways, for example from loans to individuals or to companies, credit from purchase of goods, real estate loans, insurance, and much more

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October 10, 2018, 02:37:29 PM
 #258

Of course not. Banks have their own way to earn money in order to keep the bussiness running. For example, we have administrative fee that automatically taken from our saving account every month. Then we have a fee for a bank to bank transfer and many more. Not to mention the interest they get from every loan. Imagine if one person pays up to $5 every month and times it with the numbers of the customers the bank has, then you get your numbers. And it's not a little, it's huge, huge enough to pay for their workers and many more.


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October 10, 2018, 02:37:43 PM
 #259

It seems like that, the Bank can make a lot of money from loan interest. At the Bank, is money that works and employees only calculate profits. the more banks that have customers, the greater the profit that the Bank can get, because the more money they can afford. Loaned flowering, interest is loaned again and earns more interest. so continuously.

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October 10, 2018, 02:54:31 PM
 #260

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?

money is printed by the central bank, and if the central bank wants to print money there are many factors that are needed and considered before the central bank prints money in a country, such as inflation rates, circulation rates, or bank interest rates, this is what the central bank calculates for determine how much money must be printed and later distributed to the public by the commercial bank, and come to our hands, that's the short mechanism of how the central bank prints money

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