What do banks do with money you deposit?

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asked Jan 10, 2019 in Other-Finance by nsupotsivic (220 points)
What do banks do with money you deposit?

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answered Jan 10, 2019 by DerfElbertia (370 points)
When you deposit money into the bank they don't just put your money into a vault and leave it there until you use the money from you account.

The money you deposit is loaned out to other people for mortgages, personal loans etc.

Money you deposit into the bank is also invested in stocks and bonds etc which makes the banks money as well.

So if you have a savings account at the bank and continue to make deposits into the savings account they will invest that money and send that cash money out in an armored truck to another Federal Bank.

The banks earn interest on your money which keeps them in business and helps them to pay you a percentage of interest on your savings account money to earn you money.

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