Hello Accelerated Math Students! As part of your Quarter 2 investment project, you will post on this blog using your holiday pseudonym. You will also comment on two other posts. EXTENDED DUE DATE: SUNDAY DECEMBER 11, 2016. The grades are now finished for the blog.
Tuesday, November 29, 2016
How do savings accounts work?
I learned at money.howstuffworks.com, that when you open a savings account at a bank, the bank pays you compounded interest on the money you deposit into the account. With your money, they loan it to other people, charging a higher interest rate than what they pay you. This is how banks make their money and stay in business.
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That was a very interesting fact. I've always wondered how banks made money. Thanks for sharing this information. I've also found this very informative video online: https://www.youtube.com/watch?v=w2tKg3E53DM
ReplyDeleteDid you know that 92-96% of all currency is created by the bank system? What this bank system is, is like what you said Reindeer. When money is deposited say $100. Bank can loan $90 out creating money out of no where. So when you get your bank account balance in the mail, it's actually just number the bank typed up. It's not money they have in the bank. That's when you want to withdraw a huge amount of money, you would need to tell the bank in advance. You can watch this video on Youtube to find out more. https://www.youtube.com/watch?v=iFDe5kUUyT0
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ReplyDeleteI like the fact that you summarized your source into 3 sentences. It's short, but it really tells us how the bank work. Thanks you, now I know how banks make their money. In addition, since this is a saving account you could also include the fact that you don't earn a lot of money from it because the interest rate are very low.
ReplyDeleteReindeer, did you post twice? There's nothing wrong with that, but I just wanted to double check.
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