BUB - How Banks Make Money Lesson

How Banks Make Money

How Banks Make Money: Banks accept money from depositors, sometimes paying interest, then lend the money out to customers, charging them a higher rate of interest. Banks make money on that spread. Banks make money by charging fee for services: service charges, ATM withdrawl charges, overdraft fees safe deposit box fees, telephone transfer fees, and more. Banks make money by making their own investments. Banks purchase the securities of other companies and hope they will make a profit for them.

How Banks Make Money Presentation

View the presentation below to gain a better understanding of how banks earn a profit. 

True or False: Self-Assessment

Spread is the difference between the interest a bank charges for loans and the interest a bank pays for deposits. True
Banks make money only by making loans. False
Banks make the majority of their money from investments. False
The money a bank pays a depositor for use of their money is called interest. True
Banks use your money to make money. True

 

 IMAGES CREATED BY GAVS