How Banks Make Their Money

Artiesha Artis Introduction to Business Professor E. Baltas How do they do it? The Banks at work When we figure of businesses today we rarely take the time to think of how they really came into existence. Of course we understand that each business is founded on a thought and we also known that it takes at least fifty ideas to generate one successful idea. However, once those ideas are placed into meets and become some of the great insertions we have today we scat to forget about the general purposes of why that particular inception was founded. As we progressed in class there was one affaire that kept me in deep thought when it came to businesses. This thought is the reason of my research and that thought is how is it that a swan can bring money and continue to make money? First a definition Brittanica.com defines a fix as an institution that deals in money and its substitutes and provides other services. Banks accepts bank deposits and makes loans and derives a profit from the difference in the interest rates paid and charged. Simply put banks pursue on trust. Trust that we provide when we put our money into an accounting and trust that the banks provide where they in turn distribute loans without erudite whether or not they will get that money back.

another(prenominal) Question may be arising in your minds and that question may be how do we know that we can trust the bank with our money? As long as the FDIC which is the Federal fixate Insurance Corporation a company that insures your deposits up to $100,000 with the Banking Insurance Fund, protects your bank your money is safe. Therefore if your financial institution fails for any reason the FDIC have several options to remedy this action however the most common one is to sell your deposit to another bank. Now that you know your money is safe what happens when you postulate to take your money out of the bank? Generally this is not a problem, we know that we can always go to the bank and get our money.... If you want to get a full essay, mold it on our website: Orderessay

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