| json_metadata | "{"app":"Musing","appTags":["Banks"],"appCategory":"Banks","appTitle":"Is interest rate on loans the only way banks make money?","appBody":"<p>The simple answer is No. Banks do have various smart ways to create income and some of them are as follows:-</p>\n<p>Methods on how banks make money</p>\n<p>- Interest on Loans - Yes, interest on loans may it be home, personal or mortgage loan banks get money here as an interest component. Income through interest is the primary source of income to the banks.</p>\n<p>- Interest from investments done by Banks:</p>\n<p>Banks do investment in various form and one of the well-known methods investing in government bonds and securities - from which as a result they earn interest and dividends.</p>\n<p>- Fees income - banks do charge various fees like loan processing and transfers, debit card annual fees and many others. Hence, a bank does make a lot of many by charging fees as well.</p>\n<p>- Forex operations - people do approach banks when they need forex and bank does make a quite a lot of money just doing the trading of forex. Over here we are talking about Millions of dollars worth of forex being traded. The bank here acts as a broker an in return earn money out of these forex operations.</p>\n<p>- Commisions received from third party companies - Third part companies like insurance, mutual fund houses, and many others approach bank so that their products can be bought by the bank customers and in return, banks do receive a commission from these third-party institutions which act as a source of income to the banks.</p>\n<p>So putting it all together bank is not only relying on the interest rates as a source of income. There are various other smart ways like- investment in bonds, fees collection, third-party commissions and many other ways through which bank earn money.</p>","appDepth":2,"appParentPermlink":"p3nwjx8d5","appParentAuthor":"gbebamin","musingAppId":"aU2p3C3a8N","musingAppVersion":"1.1","musingPostType":"answer"}" |
|---|
hiveblocks