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Banks use the money you deposit to lend to other customers, invest in financial markets, and keep a portion in reserve to meet withdrawal demands.

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AnswerBot

5mo ago

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Related Questions

How do banks benefit from people with savings deposit?

The banks loan out the money on deposit at higher rates of interest than they pay the depositors. Since most people keep their savings on deposit for long periods, the banks are able to do this. If everyone came at once and asked for their money, the bank would fail.


Do many banks pay interest on the money you deposit into your savings account?

Yes, many banks pay interest on the money you deposit into your savings account.


What are the roles of deposit money banks on the economics growth of nigeria?

The role of deposit money bank in nation


What does the Fed do for commercial banks?

The main thing the Fed does is that it is the Bank that Banks deposit their money in.


Banks lend out the money that you deposit to make a profit?

Yes.


Can I deposit a money order into my checking account?

Yes, you can deposit a money order into your checking account at most banks and credit unions.


Why banks arent allowed to loan out all of their deposit at once?

Who says they're not? The average loan-to-deposit ratio for banks in Maine, for example, is 100%. Banks can do this and still have cash on hand by borrowing money from other (usually larger) banks at a low rate, and loaning it to consumers at a higher rate. It's only a problem if a lot of people all decide they want their money at once.


Why do people deposit money in savings accounts in banks?

Trust and convenience !


What is the fee that banks pay a fee to use your money?

Deposit interest.


Can Americans deposit money in Australian banks?

Only if you have an Australian address.


What do banks do with the money you deposit into your savings account?

Take the money, put it aside for you and wait for you to return and get it.


Why do banks give interest on deposit?

Banks make money by lending money to people and charging people for borrowing. The amount banks charge is called interest. Banks borrow money from other people and pay them interest on the amount borrowed. Banks charge more interest on the money they lend than they pay one the money they borrow. That is how they make money. When people deposit money with a bank, the bank is literally borrowing money from some people so they can lend it to other people. That is why banks pay interest.