Post
Topic
Board Economics
Re: How the Bank works to make money?
by
novakamena
on 12/10/2018, 10:21:12 UTC
A bank is a fund-raising organization from which you send money. From there, your money will be invested in businesses to profit, or lend. You send as much money, the bank as "love" you. And even more extensive life insurance, it works just like a bank. That is why you often see banks and life insurance linked together.
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.