this post was submitted on 18 Jul 2023
71 points (98.6% liked)
Asklemmy
43818 readers
903 users here now
A loosely moderated place to ask open-ended questions
Search asklemmy π
If your post meets the following criteria, it's welcome here!
- Open-ended question
- Not offensive: at this point, we do not have the bandwidth to moderate overtly political discussions. Assume best intent and be excellent to each other.
- Not regarding using or support for Lemmy: context, see the list of support communities and tools for finding communities below
- Not ad nauseam inducing: please make sure it is a question that would be new to most members
- An actual topic of discussion
Looking for support?
Looking for a community?
- Lemmyverse: community search
- sub.rehab: maps old subreddits to fediverse options, marks official as such
- [email protected]: a community for finding communities
~Icon~ ~by~ ~@Double_[email protected]~
founded 5 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Having money means you automatically get to have more money - ie interest, rent, investments.
Why is that crazy? If I loan the bank money and they make money on my loan I should get paid for it.
How does the bank make money from your money?
If I leave a pile of money in my closet, it doesn't grow like mold.
Exactly. And that's why banks pay you to give it to them instead.
Banks provide a valuable function to society that works on two sides:
The bank takes all the money that has been deposited and makes the loan, charging interest. It then pays the depositors (less) interest to incentivise them to put money in the bank (instead of under the mattress).
In order for society to advance and grow you need a source of finance to get things off the ground. Anything from small businesses to massive infrastructure projects. Banks help facilitate that.
Banks use your money to invest. They only have to have a small percentage of their holdings in cash on hand so they can invest, make money, and pay you interest.
Your money isnβt just sitting in a vault at your local Bank of America branch.