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How the banks make their living
A bank does not simply allow the money which a customer pays into his or her account to sit in its vaults. It makes it available to other customers and in this way can earn more money on it. When a bank grants a loan, it charges a specific price for it. We call this price "interest". The rate of interest which the bank pays savers for the money they deposit at the bank is lower than the rate of interest which the bank charges its customers on the money lent to them. This is how the banks make their profit.
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Commercial banks look after their customers' money and pay interest on it. When they lend money to their customers, they charge interest on it.
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