How do banks generate income?

[crwth]

There are a lot of ways they are doing it, but the reason that they have money is because a lot of people are investing in them. They are trying to make the most out of their deposits and then invest in the right places. That's why some corporations are using shorts to say companies are downfall and making money from their investments. Investment firms have money because some banks also invest in them. That's one of the primary income that they can have for sure.

[Bushdark]

Op you have said all. But there are secret ways banks use to siphoned money from customers accounts to their private accounts. Bank workers thief money from customers from various ways. Bank take transaction fee everytime one make a transaction and also take again $2 to $3 every month end. There are some accounts that have been abandoned for some years probably the owner is dead or from one thing to the other the owner can't have access to the account so they siphoned the money to their accounts.

Banks now are becoming a complicated enterprise that what they are only interested in is to make money from the customers. Banks now are devising means to syphone money from customer mostly through different means. Sometimes they remove tax from your account frequently more than the expected amount and most time they are minute so that the customers will not mind to seek explanation about It. Sometimes I get annoyed about the way banks are charging there customers which is very ridiculous and unethical.

[CryptSafe]

There are a lot of ways they are doing it, but the reason that they have money is because a lot of people are investing in them. They are trying to make the most out of their deposits and then invest in the right places. That's why some corporations are using shorts to say companies are downfall and making money from their investments. Investment firms have money because some banks also invest in them. That's one of the primary income that they can have for sure.

Banks too are business wise though. Irrespective of their mischievous acts, they are good investors. They search for potential businesses with high market demand to invest in which they know will generate much funds for both parties involved.  
Banks and their management do have foresight of businesses that could outperform and they do quickly indicate their interest without you calling them to do so.

I have a friend who told his banker friend about his business plan and how to achieve his target not knowing that his  banker friend took it to their branch manager and upon hearing it, they invited him to invest in it and that was how his business started and today he is doing well for himself and the bank already benefited from the business as investors.

[mm2543363580]

Bank totally works on investor money and saving deposits plus interest rates they apply on accounts.  Bank obviously knows how to make money from its customers along with facilitating them with the best .
Insurance policies are also major earning for banks .

[el kaka22]

People keep talking about how banks are making profit by giving out loans and charging for stuff etc, but their only cost is not just paying people their savings back, that is not the issue, they are also doing operational costs. All those buildings, all those thousands of workers, they all come down to one thing, spending.

It means even though they are making money from your money and not really spending their own money during that, they are also spending money to give you this chance as well, even the electricity bill is a bill they need to spend, however small that might be in comparison. This is why always have a situation where you need to see the point for Banks as well. I hate them, but I give them what they are due, they always find a way.

[salad daging]

The bank includes everything that is needed, all of which requires a fee, so of course the bank will always make money from every customer who carries out its activities, the bank is also always believed by many people who have a lot of money to save it there so that the bank can circulate the money to generate their institutional advantage so it's no wonder the bank will have a lot of gratuity to get because some creditors will try to borrow or other things that the customer needs.

Imagine if the bank has many users and from these users they make transactions every day with deducted fees not to mention deductions every month, plus the interest on the loan that the bank will get is quite large, so it won't be surprising that the bank makes quite a lot of money due to various other aspects.

[bayudndy]

Most of the bank's income comes from lending interest. They assess who they want to borrow from by assessing the borrower's creditworthiness and calculating interest rates based on factors such as the type of loan, the borrower's risk profile, and market conditions. Besides, the interest rates will be different for different objects and levels of trust. Also, fees from services like account maintenance fees, transaction fees, bank transfer fees, ATM fees, etc. also accounted for a small part of the income. With them maximizing their income sources, it is understandable to be rich.

[serjent05]

Aside from the peoples' deposits, there are lots of ways banks generate income.  What stated by @OP are just a few of the services banks are generating income.  I think services generated by bank can be classified into some categories like:

• Interest based on revenue
• Fee-based revenue
• Trading and Investment-Related Revenue

All in all, banks don't just get or generate their income on using the deposit of their client but also offer financial services where they charge their customer.  So even without the deposits as long as the banks have many clients that subscribe to their services, they will be able to maintain their service for a long time.

[jaberwock]

Banks generate their income in many ways and most of which were being sourced for through our individual accounts with them, they make these deductiona in form of charges on many services they renders to us and the maintenance they make on our account, this is what you can't get in cryptocurrency because all this form of corperate extortions were made disabled in this new technology of financial system especially when you are dealing with bitcoin, tou have control over the amount you will be charged for performig a transaction and no maintenance fee on tour bitcoin or crypto wallet.

I use an online bank app and believe it or not, they never charge me a fee for storing money there. I heard some local banks are like this too but there is still a fee in sending money from a different bank company. I guess this is just normal because if we noticed this also happens with crypto, I mean there is also a transaction fee here.

Bank charges are not a form of extortion. Extortion has its own definition. Banks are a business and in bitcoin there are also miners who are doing a business. Bitcoin is only better than the banks because it is decentralized. As long we hold our private keys and keep it in the safe place, we are sure that no one can touch our coins.

[KingsDen]

Bank as a financial institution which works closely with the Government are highly centralized and even money in diverse means, both in genuine ways and in dubious ways. You have listed some genuine means that banks earn, let me try and list out some fraudulent ways bank earns.

• The dead of their customer, who do not have a proper way of handling money to their next of kin. All their money goes to the bank
• They assist crime and money  laundry
• They sell your data to big corporate organisations
• They collaborate with the government  to seize or obscure individuals funds
• Wrong calculations  of loans, mortgages and more

[_BlackStar]

• The dead of their customer, who do not have a proper way of handling money to their next of kin. All their money goes to the bank

Heirs, children, wives or husbands are people trusted by the bank for funds from customers who have died. If the bank does not want to return the customer's funds to their heirs, then it is clear that they can be sued for a cunning plan.

Have you ever found a bank freeze the funds forever of dead customers while they have heirs?
I've honestly never heard of it, but banks aren't very trustworthy in certain cases. The reputation of the bank is bad, especially when people are familiar with the modern financial system which is called decentralization.

[molsewid]

Financial institutions (banks) are responsible in handling financial issues, records, accounts and income of individuals, companies, churches and organizations. They respond promptly according to your demands on your accounts, they also have zero tolerance for fraud and are very security conscious, security intelligence and anti financial crime expertise but they've policies of not collecting dime from customers accounts yet banks are most wealthiest institutions on earth.

How do they make money?
* mortgage - using some billionaires account to buy housing properties and leasing them
* estate and lands with same patterns
* SMS alert charges
* Transfer charges
* Syphons dormant accounts or dead people accounts that are inactive with enough money in it.
* ATM and investment cards
* sales of currencies like dollar to naira
* preparation of international documents
* savings people's valuables like gold, certificate, court documents, WILLS, and so on.

This is what makes financial institutions very wealthy.

Here in us there are some banks who has a high maintaining balance if you forget to maintain the amount they will continously deduct it to your account until you don't have enough money. Although it is written and has been in their t&a before you join the bank still it is kinda hard to maintain because of the inflation right now, when you don't have other resources. Other than that banks earns in their credit offers and loans.

[el kaka22]

Everyone said the right methods, there is nothing to add to that point and if anyone is wondering just how they generate income then they can just take a look at that. But also, we should remember that there are a lot of banks that also has partnerships or right up ownerships of insurance companies as well.

At some point, in history they realized having peoples money in their banks managed to make them so rich, so they built in an insurance company idea. This means you give them money and if nothing happens to you then it is just their money, literally have to pay you back nothing, they only pay something if something happens to you, and that is very important part of it. For example I have health insurance just in case, but haven't used it all year so far, all of that is profit to them. They even use it for investments and make even more.

[kojektea]

sometimes the promotions they make offer as if they can serve us very well but there they really use our money for banking benefits. but if we only intend to save, I'm sure we won't feel like they are "squeezing" us. but from some of the banks that I have experienced they rotate customer money in the real estate industry and distribute the results to their investors and their personal profits. I only see the good side, maybe there are also some dark sides that I myself don't understand how they can do it.

[Vaskiy]

Beyond all the mentioned ways of making money, the banks have got big plans to earn and they've been doing it for a decade. We're the highest in population and the country have got more than half the people with bank accounts. The technology advancement lets us to check the balance amount in our account. If we use the ATM to check this beyond five times we were charged. Another thing there is something called minimum balance, failing to do it makes your account go on negative. Indirect robbery is happening and we weren't able to make questions.

[blockman]

sometimes the promotions they make offer as if they can serve us very well but there they really use our money for banking benefits. but if we only intend to save, I'm sure we won't feel like they are "squeezing" us. but from some of the banks that I have experienced they rotate customer money in the real estate industry and distribute the results to their investors and their personal profits.

Not just in real estate but also in other investments like government bonds and stocks as well. That's where they're diversifying their money and mostly, they're using it to lend it to the other customers. While they give interest for those savings but they're mere amounts and far from the actual percentage that they have from the customers to whom they lend their money.

I only see the good side, maybe there are also some dark sides that I myself don't understand how they can do it.

One incident in my country is where one huge bank has been involved with money laundering and it's not just a small amount but also involving another bank offshore.

[ammo121810]

Mostly banks generate income through the products and services they provided to their client such as;
Interest income- banks earn interest on loans and other interest earning assets such as government securities, corporate bonds and mortgages. Secondly banks also generate income through their non interest sources such as transaction fees and commissions on services like ATM machine usage, processing of credit cards, and investment advisory services. They also generate income through trading activities such as buying and selling securities, currencies and commodities. Usually the banks uses the customer deposits or savings for them to be able to do trading. Another one bank generates income through investment banking services such as underwriting new securities issues, mergers and acquisitions and other corporate finance activities.

[yudi09]

-snip-

This is what makes financial institutions very wealthy.

They gain profits that make them rich because of interest or spread based income. They also get profits from sources outside of banking services.
Income from interest is the main priority of the bank. People or customers who want to take loans are very concerned about them because they, as the bank, know they will get a lot of returns with a set interest percentage in a matter of time.

That is why many people are unable and willing to cooperate with official financial institutions under the legal auspices of the government because they do not want their lives to be pressured by the banking system.

[Vishnu.Reang]

Bank utilize customer's money to make more profit from there, like giving loan and collect interest or investing on stock market. They also utilize customer's money for their personal gain as well. Investment is the source of bank, more we invest, more they earn. Apart from this they earn from If the account falls below the minimum balance it may be assessed fees for not maintaining minimum balance. Bank generate more income from locker rent, trading profit. Message alert charges, ATM charges, transaction charges etc, which people never notice.
 

[ChiBitCTy]

As a long time financial advisor, and someone who’s worked closely with banks throughout my career, the main reason I “got in to” bitcoin back in 2014ish was my utter disdain for banks and how they were ran. So much corruption and bullshit, and I was fascinated and blown away with the technology that bitcoin brought to the table for the first time.

You forgot to mention they make money, A LOT OF MONEY, by scamming the shit out of their customers.