Eli5: How do banks consistently make a return on the customers money they invest?

Question

You can’t withdraw all your money from your bank account because it is constantly being invested and reinvested, but how come banks are never ‘down’ on these investments in the same way the average person is with their investments? Are they protected by government guarantee so they can just reap huge profits by investing constantly without risk?

In: 0

Answer 1

Who told you that you can’t withdraw all of your money from your bank account? Unless you are invested in mutual funds or stocks and if you are talking about a typical checking or savings plan, you absolutely can take all of your money out whenever you want.