Where exactly (apart from bank charges) do banks make all their money from?
Answer:
interest, overdraft fees, credit card interest and fees, ATM fees for other bank cards using their tellers, etc.
Investments; credit packages, (mortgages, loans, etc) Insurance deals, selling additional services.
interest off investing your money..
They make their money because they loan money at a higher rate of interest than they pay in interest for people who save their money.
loan interest
Loans. They also use your money that you have in your acct. and they put it in their own business acct. and draw alot of interest off of it. Alot more than we draw from our savings. Just think of how much money banks have from their customers and how much they draw from it!
many banks will invest the money on certain stock markets. I know people like Deutche bank and UBS deal in the currency exchange. With the kind of money they invest and the timframe they make millions if not billions
Interest on the money that they loan. Some of the money that they loan is yours. Banks assume that they will have a percentage of their deposits available at all times to loan out to others to make money on.
On your savings account, you get 1% interest, on a car loan, you PAY 10%, on a house loan, you PAY 8%
They also make money on bank-bank loans. That's what the PRIME Interest rate is about.
Most banks still make most of their money on the spread between what they pay depositors, and what they charge borrowers. But credit card charges -- interest, late charges, overlimit charges, and the like -- have become increasingly important.
interest on loans vs interest on savings, eg give 2% on savings and charge 8% on loans, make the six percent difference. Because people only come back for a little bit of their savings they can 'create credit' look up liquidity ratios to find out more. So they can lend out more than they have so to speak, that which is not lent out is invested in other items with varying risk and reward, eg government bills.
Their the main ways but foreign exchange and forex is a big thing too
Bank charges is an increasingly larger portion of their revenue. Having said that, the traditional model for banks making money is the spread between the interest they pay on deposits and the interest they receive on loans.
Banks loan money and charge interest, like for a mortgage. A mortgage represents the lowest risk and the highest return for the bank. Credit cards represent a low risk as well but have a very high rate of return since most people do not pay off the whole amount and thus pay a very high rate of interest. With the current laws, it is hard to file for bankruptcy and discharge debt, so the bank will get their money. They may have to wait for a while, but they will get it. The largest portion of the money a bank makes comes from interest on money loaned.
interest from loans.
Corporate Banking
investing your money for more than they pay you and lending you money for more than they pay to borrow it.
Interest made off of your loans.
loans, investments
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