It just seems like a semi necessary thing to have to use a bank, why do they pay me a % to keep money there?
In: 1333
They pay you money to keep you money there because they can use those reserves of cash to make loans where they charge higher rates of interest. They pay you 2% on a savings account, and they charge 7% interest on a mortgage or car loan, 25% on a credit card balance. That spread is their primary revenue source. Banks have reserve requirements, meaning they can only lend more if their deposits go up.
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