Bank Deposits: How do banks profit from them today?

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#3
Deposit account (How banking works) - Wikipedia

Typically, a bank will not hold the entire sum in reserve, but will loan most of the money out to other clients, in a process known as fractional-reserve banking. This allows providers to earn interest on the asset and hence to pay out interest on deposits.

By transferring the ownership of deposits from one party to another, banks can avoid using physical cash as a method of payment. Commercial bank deposits account for most of the money supply in use today. For example, if a bank in the United States makes a loan to a customer by depositing the loan proceeds in that customer's checking account, the bank typically records this event by debiting an asset account on the bank's books (called loans receivable or some similar name) and credits the deposit liability or checking account of the customer on the bank's books. From an economic standpoint, the bank has essentially created economic money (although not legal tender). The customer's checking account balance has no dollar bills in it, as a demand deposit account is simply a liability owed by the bank to its customer. In this way, commercial banks are allowed to increase the money supply (without printing currency, or legal tender).
 
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McDad said:
I have interest in this topic.
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Let’s just say that something is paying for your free checking account.

And somebody is paying your savings account and CD interest...and then some.
 
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Fractional reserve lending is the biggest scam going today. 90% of what banks lend is fictional money they never had in the 1st place...but get behind on your house payments, and they will foreclose on you and take your very real house. Then sell it, and finance the buyer again for the same piece of property. Works out great for them...and when disaster strikes, like a flood or tornado, they will get bailed out with taxpayer money just like the insurance companies...too big to fail... it is really criminal what they do.
 
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marcusluvsvols said:
Fractional reserve lending is the biggest scam going today. 90% of what banks lend is fictional money they never had in the 1st place...but get behind on your house payments, and they will foreclose on you and take your very real house. Then sell it, and finance the buyer again for the same piece of property. Works out great for them...and when disaster strikes, like a flood or tornado, they will get bailed out with taxpayer money just like the insurance companies...too big to fail... it is really criminal what they do.
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Is it though? You know what you’re getting yourself into when you walk thorough the door.

If you like ATM’s, branches, a banking website, a banking app, etc. then the bank has to make their profits somewhere.

If you can settle for a happy medium, go the co-op Route.

Otherwise, you’re going to have to use your mattress.

Marcus, I agree with you on the part that the banks should not be bailed out by tax payers.
 
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#15
My interest is becoming negative

Negative-interest-rate-policy.jpg
 
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#21
#21
DC_Vol said:
All of this is common knowledge, Ras. What are you getting at here?
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Why all of a sudden is Goldman Sachs now allowing people to open accounts with them with practically no minimum, when before the minimum account was over $1 million?
 
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Rasputin_Vol said:
Why all of a sudden is Goldman Sachs now allowing people to open accounts with them with practically no minimum, when before the minimum account was over $1 million?
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Getting more account holders in the door.

If you “bank” with Goldman, you’re much more likely to “invest” with Goldman.
 
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