I never learned how it works
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When you deposit money in a bank, you are actually giving them a loan. Think of it that way. But since they are basically guaranteed to pay back the loan, and you can take the money anytime you want, the interest rate on it is super low.
Even if we go back only about 20 years, during that time, banks were often offering pretty killer rates of like 5%… as long as you don’t take out your cash right away. Today, if you do want to be able to take out your cash right away, you can’t ask for much interest on it and may get like 0.01%-3% or often on the lowest end.
Banks have gotten a bit smarter over time, and economic conditions, and now they understand that they also offer you a service you will pay for, they change this so that now they generally charge fees for your their services and offer very low to zero interest rates for many customers — they learned that its just more profitable for them to operate this way instead of trying to compete by offering higher interest rates — offer better service, charge a small fee, and the cost of doing all that offsets, and they end up making more from you — and they get the money on loan.
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