When people take a loan out do banks get that money from their vault?

Answers:1   |   LastUpdateAt:2012-08-11 01:37:04  

Asked at 2012-08-10 13:18:01
Only by asking the bank syg show you the money you pay from your dome.
Answer1, Answered at 2012-08-11 01:37:04
The banks get money from their depositors. When you deposit money in a savings account or checking account , the bank maintains a small percentage of that money in your vault. This is known as the reserve rate . Is set by the Federal Reserve Bank of the United States (" The Fed" ) , a branch of U.S. government . The bank loans out the remaining money to borrowers. This is how banks make money. Banks loan money from depositors and not their own money.

Most people make deposits in the form of checks instead of currency ( cash). The bank holds the controls in the vault of a couple of hours later sent to the Federal Reserve Compensation , another part of the Federal Reserve. The Fed pays banks with deposits as a computer input .

Most of the money the bank lends is in the form of journal entries instead of actual currency. It's a bit like the way supermarkets work. Customers pay for your groceries with debit cards , credit cards , checks or cash. The supermarket brings cash and checks to the bank. The bank gives credit supermarket that money in the bank's computer . Debit cards and credit cards are also treated as computer entries . The supermarket keeps enough money in his safe for the change .
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