Asked by: Yeshika Mallinsonpersonal finance credit cards
What banks do with your money?
Last Updated: 8th June, 2020
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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.
Beside above, can a bank take your money? Under federal law and regulation, financial institutionscannot do a setoff of money in your account to covermissed consumer credit card payments that you owe the institution(unless you previously authorized it to pay your credit cardthrough automatic withdrawals from youraccount).
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!
Do banks have to give you your 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.