Eli5 why do banks give interest on money that I am keeping there?

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It just seems like a semi necessary thing to have to use a bank, why do they pay me a % to keep money there?

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Anonymous 0 Comments

When you give your money to a bank, they use that money to give out loans. They pay back a small amount of their profits from the loans to you, the person whose money they are lending out. The interest payments are an incentive to use their bank over others and a way of paying you back.

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