Co-Authored By:
Banks use your money to makemoney
The interest you paid on the loan balance added up as aperfect source of revenue for the bank, partof which they repaid back to those deposit makers. Likewise,your deposits -- from savings, certificates ofdeposit, money market accounts, etc.
Likewise, how does a bank use your money?
It all ties back to the fundamental way banksmake money: Banks use depositors' money tomake loans. The amount of interest the banks collect on theloans is greater than the amount of interest they pay to customerswith savings accounts—and the difference is the banks'profit.
Considering this, what do banks do with money in savings accounts?
When you put your money into a savingsaccount, it earns interest. Interest is money the bankpays you so that they can use your money to fund loans forother people. That doesn't mean you can't have your moneywhenever you want it, though. That's just how banks makemoney -- by selling money!
In general, banks must report any transactionexceeding $10,000 in cash. The law also requiresbanks to check identification on any transaction thatwould trigger a report. In other words, even if your bankdoesn't usually ask for ID with withdrawals, it must do sofor withdrawals over $10,000.