Banks are institutions that can be either online or in a brick and mortar location where people keep their money in checking, savings and other types of financial accounts. Banks are a vital part of the US economy because they help people to purchase things like cars or homes through loans they provide to consumers.
The question is, why do banks want to provide these services to customers? What do the banks get out of helping you to keep your account safe? The answer is that banking is a business. One that couldn’t operate without their online and offline customers. In fact, with the Internet becoming more popular every day, online banking has gotten the banks even more business.
Banks are in the business of making money. While they may not sell a product in the sense that other companies do, they do provide a vital service in making loans and providing other kinds of financial products like insurance policies or securities.
When someone opens up an online banking account or one at a brick and mortar location, the bank uses the money that the depositors put into their account, therefore the bank is in a sense "buying" your money and "selling" it to the people who want a loan. So, part of the reason they want your money is so that they can use it for those purposes.
Banks want people’s money so they attract more online banking or other types of account, by paying interest or offering other types of services. No matter if you go online to use your bank or not, if the bank uses the account online to help loan out money, then they also make money from that account through the interest charged on the loans.
Banks can also make money from online and offline banking via customer’s credit cards, which is why they want your money that you spend to pay your credit card bills. In fact, they want you to carry a balance so that your account earns them more interest on the payments when you buy things online or elsewhere. Depending on how long it takes for a customer to pay off their credit card account balance, the bank can potentially earn a large sum from these online accounts.
Since banks need your account, they compete to get your money deposited into an online or offline account. If a bank has a lot of accounts, then it can give out more loans and thereby make more money for the banking business. Banks mainly make money on the interest charged to things like loans or credit accounts, but they also make money by the fees they charge to customers. So, they want your money so that they can charge you these fees and interest in exchange for the services they provide to store and handle your money and to provide you with loans or a credit account.
Here’s how it works. Banks take your money and store it in your account, whether it is online or offline. Then, they add up all of the money in everyone’s account and the Federal Reserve allows them to lend out between three and 10 percent of the cash they have on hand or what they have in a Federal Reserve account. So, they want your money so they will be allowed to make higher loans and then they will make more interest and fees through the payments made online or offline to pay for a credit account bill or a loan provided by the banks.
The money the banks make from using your money in your account means that your money is actually helping to build up your community by making it possible for someone to open an online business or buy a home or other things because they can get a loan through the bank.
This doesn’t mean they are literally giving away customer’s money. Your money stays perfectly safe in your account whether that is online or offline. It just means the Federal Reserve sees that they are doing well so it lets them give loans and charge interest and fees based on the banking accounts customers trust the bank to manage.
However, if would likely cause a big problem if everyone who holds an account at a banking institution tried to get their money at the same time, so banks operate on their customer’s trust. This trust goes both ways since a bank doesn't really know if they will get their money back if they give out a loan.
The bottom line is that banking institutions indeed want your money, as it allows them to use a percentage of the account added to the accounts of other online and offline customers to provide loans, etc., so they can make money from the interest and fees.