0
You earn an interest by depositing your money with the bank either in your savings account or through a fixed deposit. The bank grants loans to other customers and earns an interest out of it. Since it is your money they are using to give off loans, they share a portion of the profit they earn with you by means of an interest that gets paid out to the deposit customers.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
Does all money deposited in a bank earn interest?
No. Money deposited in checking/current accounts do not earn any interest.
Why should you deposit money in your bank?
You can earn interest.
Why you go to a bank?
Well, you go to a bank because you can earn interest for the money you made.
How does bank earn money?
by making money on the interest that they charge on loans and credit products.
Is the interest earn t in a bank account classed as an investment?
Interest earned in a bank account is not an investment. It is considered an income. The money that you have in the bank account that earned the interest for you is considered the investment
How does money in my account benefit the bank. does it mean the bank is richer?
The money you deposit into your account is an obligation for the bank to be paid to you anytime you want. The bank would lend this money to its other customers and earn an interest income from it.
How bank earns?
Banks earn money by holding money you put into the bank and using it to loan to others. They then collect interest from that to support themselves and to repay you back.
How do banks earn?
If you mean earn money, a large revenue source is interest. Loans from a bank always have higher interest than any kind of an investment in the bank so they make money. Also, if it is an investment bank, it may buy shares in a company or even acquire businesses and make other investments.
How does interest bearing savings account work?
All Savings accounts earn interest. Here, you deposit money from your earnings into this account. The bank utilizes this money to grant loans and earn a profit out of it. But, in case of a savings account, you can withdraw the money anytime you want and the bank cannot effectively utilize this money for making profits. So they give you only a lower interest rate.
How does a interest bearing savings account work?
All Savings accounts earn interest. Here, you deposit money from your earnings into this account. The bank utilizes this money to grant loans and earn a profit out of it. But, in case of a savings account, you can withdraw the money anytime you want and the bank cannot effectively utilize this money for making profits. So they give you only a lower interest rate.
How does a bank make money from issuing money market certificates?
They make money by taking the money that you have deposited and loaning it out to another individual, business, or bank at a higher interest rate than they are paying you. For example, they may be paying you 1.5% interest and then loaning the money in a mortgage at 6%. This is true of all interest-bearing accounts. When a bank issues a money market certificate it pays interest to the certificate holder in exchange for the bank being able to keep the money for a specified amount of time. During the time that the bank is holding the money they invest it at higher interest rates, such as mortgage loans. The difference between what they earn on the investments and what they pay in interest is profit for the bank.
Can you earn interest from a credit card if you have a positive credit account and does the credit company have to pay you interest for borrowing your money?
You cannon earn interest from a credit card if you have a positive credit account. The bank will simply give you a refund if you have overpaid.
