Before we dive into how banks make money, we need to understand there are different types of banks, and they all make money in different ways. - Retail Banks- Commercial Banks- Central Banks- Credit Union
Traditional banks use depositors money to make money off of other people in the form of financial products like:– Vehicle loans– Credit card payments– Short-term loans– Small business loans– Personal loans
Loans And Other Interest-Bearing Financial Vehicles
By lending borrowers the money from depositors, banks profit heavily from various fees and interest rates.These simple fees can result in tens of thousands of dollars in profit paid to the financial institution.
Annual Percentage Rates Are Powerful Income Sources