Banks don’t just store the money that people deposit. Depending on the bank, they loan it out to others (mortgages, car loans) and/or invest it and make profits off the interest and investment growth. They keep a relatively small amount of deposited cash as a reserve to cover withdrawal requests.
Sometimes (hopefully very rarely) something causes a crisis of confidence for a bank’s customers and a whole bunch of them try to withdraw their money at the same time, exhausting the bank’s reserve. This is called “a run on the bank.” When a bank can’t meet its customer withdrawal obligations, it fails. (Watch the movie: “It’s a Wonderful Life”)
In the US the FDIC insures bank accounts up to $250k each so customers will eventually get at least some of their funds back.
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