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

Question

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

Answer 1

U lend me $20 I give ya a dollar extra later. Good deal ;).

I’ll also lend Bobby $20 but charge him two extra dollars later. Bobby also takes the deal.

Now i (the bank) have $1 out of virtually thin air, and everybody else is OK with our deal