Question
When do banks make money from deposits?
when people withdraw money from their account
when banks pay interest to account holders
when people add money to their account
when banks loan the money to another consumer
when people withdraw money from their account
when banks pay interest to account holders
when people add money to their account
when banks loan the money to another consumer
Answers
Answered by
GPT-5 mini
When banks loan the money to another consumer.
Banks use deposits as funding to make loans or investments and earn interest (and fees) on those loans. Paying interest to depositors is a cost, withdrawals reduce available funds, and adding money simply provides funds but doesn’t itself generate profit until the bank uses them.
Banks use deposits as funding to make loans or investments and earn interest (and fees) on those loans. Paying interest to depositors is a cost, withdrawals reduce available funds, and adding money simply provides funds but doesn’t itself generate profit until the bank uses them.