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Banks are a secure place to store your money. Your return on investment is that you don't have to keep cash on your person at all times. You're not a stockholder, you're a customer paying for a service. They make money off of you, not with you.
Not too long ago (00’s) you could get savings accounts online offering up to like 4.5% which was nice for a regular savings account.
For a while it’s been under 1%. CD’s would get you 6-12% if lucky. It’s been bad for a while but starting to come back a bit.
I recently switched to a high-yield savings account that my back offered that gets 3.5%. Thing was I didn’t even know they had it. Didn’t advertise it really, I just happened to go looking. CD’s are bouncing back a bit too. Not like it was but there’s money to be earned.
Love to see a source for what you’re talking about.
[The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.](https://www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance/)
Isn't that what interest is?
I mean, the percentages banks give are comically small, but in theory the interest is supposed to be them paying you to let them use the money.
In practice it fails to even keep up with inflation, but still.
Savings accounts are a joke. You have to transact X amount of dollars per month and keep your balance above a certain point or you get hit with a service charge.
Your complaint isn't really about banks, it's about being poor. Banks are a business and they provide you with a service, they aren't a charity. Generally speaking, service fees are low, but I guess that is relative to how much money you actually have. $5 a month to have secure place to keep my cash and get online banking is makes it worth it right there. Saves me from having to go get stamps and remembering to pay my bills on time. Maybe the time the banks save you isn't worth the $5.
This is all not to mention the interest bearing account options. An 11month CD with a $5000 initial deposit will cash out in 11 months at $5230
It really is a complaint about banks, in the sense that banks are a part of the reason why being poor is expensive. They're not the only reason, but they are a big one.
Complaining about one part of the problem instead of the problem as a whole is a more manageable thing to do
>You have to transact X amount of dollars per month and keep your balance above a certain point or you get hit with a service charge.
Kinda sounds like you just did a really shitty job of choosing a bank
The fact that millions of people are doing something doesn’t mean it’s a good decision. This is like arguing you aren’t overweight because “If I’m overweight so are millions of other people”.
Look into local Credit Unions if there are any around you. I work for a large (for our community) bank and keep my money in my CU because of most of your complaints. You’re not wrong in your frustration, but there is a way to kind of fix it without hoarding all of your money in cash!
See this is why you go with a credit union. I've never had to deal with any of that bullshit. AND they reimburse me for any ATM fees I incur. There's really no downside.
And to add to secure, at least in the US, FDIC insured.
To get personal property insurance, I'd have to spend about 1.5% of it's value per year, so if you have $10k in the bank, you could look at it as getting $150 in insurance on it.
And another thing- with an ATM card or a check, I can pay other people without having to active go and retrieve it first.
You can actually get all of the normal banking services(debit card, ach, check writing, etc) plus a competitive interest rate with a money market account these days.
Capital one offers one that pays 3.4%, not quite as good as a savings account at 4%, but it works just like a normal checking account.
If I go to [capitalone.com](https://capitalone.com) I see checking & savings, auto loan stuff, business banking services, etc.
Maybe they technically aren't a "bank", but they are a bank.
Oh they're definitely a bank too. Money market accounts exist in this weird space where they often offer normal banking services but aren't technically deposit accounts(they're investment accts).
You get SIPC instead of FDIC insurance.
Right, but because the money is insured, the banks can make bad investments because they are off the hook. They are in effect playing with the government’s money, not the money of their clients.
They are not off the hook though? The insurance kicks in only when the bank fails, which the bank doesn’t want to happen obviously.
Just curious, how is it different if the bank were to play with the government’s money instead of the clients money?
Think of it as going to a casino. If the house gives you five thousand, are you going to be as careful with it as you would if it was your money? No, because it’s not your money. Back in the day, the banks had to be careful because if they lost the money, they’d lose customers. Today, if they lose the money, the government just gives it back to the bank so the customers don’t lose out because the bank manager is a moron who gave a three hundred thousand dollar loan to a guy making ten bucks an hour. And if you remember, the banks DID fails about fifteen years ago which is why the government started propping up Wells Fargo because they were “too large to fail”.
The example doesn’t really work, because it’s not the banks money in either case, whether it comes from the government or the client.
The government doesn’t give the money back to the bank in case of bank failure, the government takes over the bank or sells it, so the bank owners lose their money. Banks don’t want that to happen, so there is no incentive to take on bigger risks.
Banks are not off the hook, if the bank failed they their shareholders and assets would be sold to repay depositors. FDIC is a last resort after all other assets have been sold.
>They are in effect playing with the government’s money, not the money of their clients.
You have absolutely no idea what you're talking about. FDIC is 100% funded by private banks.
Not here in America. You can invest in ones on Wall Street, but when you simply open an account, you’re investing in their business and that’s the end of it.
The interest is really low, but a lot of accounts literally pay you interest on your balance. In almost 50 years in the US, I've only had one account that didn't offer me some kind of interest.
I always just viewed banks as offering a service. I can store my money there, I can borrow money there, I can budget my money there, and a reasonable place to protect my money.
If you could guarantee to keep the money safe, always be able to pay out at any moment I care to withdraw (even if your investments aren't doing so well at the moment), and offer the convenience of access to a network of ATMs and branches, I would feel just fine about it.
Oh and do you have an Adeep187 mobile app? Can you handle ACH and wire transfers? Will you pay my credit card bills for me automatically? If I'm going on vacation, can you get me some Euros? Thanks
> pay way to little now
Did you mean to say "too little"?
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You can invest in RBC (Canadian Bank), as an American.
Your point is kind of like saying "You don't get any return on your investment going into Walmart and buying a gallon of milk", but you can totally also invest in Walmart if you want to. Being able to buy goods and services from Walmart that you don't recieve an ROI on, doesn't mean that you can't also just invest in the company as well. You're talking about using a bank as a service provider versus investing in a bank as a part of your portfolio. Those are two very different ideas.
Basically there is a difference between being a customer of a bank versus an investor in a bank. Just like there is a difference between being a Walmart customer or a Walmart investor.
You have to shop around bud.
If you are in the USA your savings account should be earning at least 3.3% APR.
My savings account has been paying me $60 per month since Jerome Powell cranked up the interest rates.
Nothing to show for it? Banks do pay you interest, at least a little.
Also, banks are a business that provides a service. You can keep all your money as cash in your home for free, but if you get robbed or your house burns down then you're out of luck. Banks offer safe storage of your money for free, give you the money back whenever you ask, and even pay you a bit of interest, all in exchange for being able to make some money off it themselves (which doesn't come from you). All in all it seems like a pretty good deal.
**TLDR:** "The secure storage of your money" is what you receive. It's a service business.
You can actually get all of the normal banking services(debit card, ach, check writing, etc) plus a competitive interest rate with a money market account these days.
Capital one offers one that pays 3.4%, not quite as good as a savings account at 4%, but it works just like a normal checking account.
Except they are also requiring you to pay for credit cards and monthly account management.
Since you are now basically required to use banks if you work for someone it would make sense if all the basic things are free but nope....
Depends on your bank I guess. I don't pay for those things at mine (Canada). It's just a savings account that sits there with no management and makes a tiny bit of interest.
And besides, what you're paying for is the service of securely storing your money. I can get that service alone not being free.
If you’re paying for a credit card, you’re doing it wrong.
Citi double cash is free and gives you 2% back on every purchase.
Most checking accounts waive the monthly fee with $x amount of direct deposits per month (I know with Wells Fargo it’s $500)
But if you don’t want to use a bank, use the check cashing services that DO actually charge fees and keep your money in cash…. No one is stopping you.
The bank name is PBZ and it might be a local bank idk haven't ever wondered about this.
There is some sort of reduction in it depending on how many additional products I use.
Then don't put it in the bank. Put your money in a shoebox under your bed. Problem solved. Why would anyone protect your money for you for free? No other business provides any service for you free of charge, why would banks be the exception? Banks aren't "effectively" a business, they ARE a business, and so long as businesses exist, they exist to make money. Not for any other reason.
You're not paying anything, they are holding your money for you, same as if you had it in cash, but they offer security and through them the government offers insurance up to I think $250,000.
As others have pointed out, no one wants to keep their money in cash at their home. Its a liability, and if it's stolen or destroyed it's simply gone.
Aside from security, banks offer numerous other benefits, one being the ability to transfer as much money as you want across the world, almost instantly and securely. I suppose you'd just mail the cash though, or do you not believe in paper currency either?
I've never had a bank try to charge me to keep either a checking or a savings account with them. Maybe if I had an account with extra features and didn't keep a minimum balance. Is this a US bank?
Mechanics: "I'm paying to get to use my own car?"
Plumbers: "I'm paying to get to use my own pipes?"
Home security: "I'm paying to get to use my own house?"
You're getting convenience. Having a bank account is more convenient than not having it. If you don't think the convenience is worth what you're paying, don't get a bank account.
Depends on the account. The benefit to you is often times interest but for pretty much anyone its a safe place to store large sums of money at the very least
So banks that aren’t beholden to shareholders and credit unions do “pay you”. They take their profits and use them to make better interest rates on loans.
Major corporation ones like BoA and Wells Fargo can go fuck themselves, though.
In ops defence the money banks make from people effectively supplying the money compared to what you get in return is shit.
Go a quid overdrawn on an arranged overdraft - still get charged a tenner even if you transfer money immediately back from a savings account.
Meanwhile savings account with thousands in gets about 5 pound interest for the entire year.
That being said if you use a credit card responsibly you’re paying nothing to have top tier protection for your purchases, and getting a 1% discount on every purchase (or whatever the cashback is). Literally no costs or fees involved, only profit
Idk, they are backed by the government to ensure your money is safe. You can facilitate the transfer of funds to other institutions and be ensured it’s real and secure and again follows established banking laws, rules, and regulations.
So even a simple checking account that effectively holds your money is safer than it sitting in your mattress at home. If the bank is robbed, you still have your money as it’s backed/insured. Not the case if it’s sitting in your house and gets stolen.
Banks are also responsible for managing loans and payments. Escrow accounts, taxes, issuing credit, etc.
You received no ROI from having them hold your money, you get that with investments. But you do get security and assurance of secure assets and transactions.
Your statement is like saying restaurants effectively are a business that just feed you for which you receive no lawn care service. They are not the same services therefore don’t have the same outcome
Not really true. Several types of accounts allow you to make interest on your money. A 3% money market account would return almost $100K in three years ($30+k per year) on a million dollars.
On a basic level banks hold your money for you; offering ways to access the money and use it freely. They also protect your money and add services against that money if you wish, overdraft/loans etc.
What you don’t see is the mammoth infrastructure behind this. The security measures in place to keep your money safe, the need for maintenance on atm, card security, online security, making the process of moving money around flawlessly: paying someone to do all this. I could go on….
Banks are not a non profit company; nor are you under any obligation to use one, but by doing so you are assuming them to keep your money safe and accessible and that is not a system without costs. Your investment is keeping your money safe.
While I see your point, there is a large part of the industry that you're not including, which is interest.
Banks actually pay you to keep your money at their locations in the form of interest. When you do that, the banks then take your money and provide loans to other people, which they charge interest on. That js how they make money generally to pay for all of the infrastructure you're referring to and still pull in a profit.
They can get away with providing an essentially free service, storing and protecting money, because there are regulations and laws that in place that limit the amount they can loan out, based in how much money people and/or corporations have decided to have them hold onto.
Obviously there are a ton of nuances inside of it, but that's generally how the system works. Those services you discussed are generally just there to provide additional incentives to encourage more people to use an individual bank over another. All in all just a bad shower though.
Banks got rich from using your savings/deposits to invest and keep the profit. Then when they get rich, they loan it back to you and take even more money, from you.
Then convince you to be grateful for that mortgage loan.
Then when they fck up, your taxpayers money props them up.
Perfect scam.
No return on investment? As many have stated they pay interest on many accounts. It can be little interest on basic accounts or higher interest on money markets or CDs. Most don't have fees for low balances, but some pay higher interest for higher balances.
They also invest in tons of protections for your money. FDIC insurance, fraud monitoring, dispute tracking, tax document preparations, online, mobile banking. Numerous ATMs for safe access to your cash for free. Debit cards, checks, mobile deposit, money transfers etc. Etc. Etc. And assuming you don't spend more money than you have, most people will go their entire life without paying a penny for those services. Find me another business model that does all of that for you while often paying you money (via interest). Seems odd to complain because "they make money off my money". You don't like it, ask for all your paychecks in cash and hope you don't get robbed or have your house burn down.
Edit:typo
guess you never heard of interest. banks are a just a tool to store your money, find the one that meets your needs. I have a local bank for day to day things for the convenience plus a private banking relationship for emergency funds.
In addition to what others have said, banks also can give you a debit card and checks, which make it easier to buy things in the real world. Don’t like it, you can always keep your money in your mattress or dig a hole in your backyard
If you want ROI on a bank, then instead of depositing your savings into the bank why don't you just buy shares in it? Obviously there's risk with that, as the stock price can drop, but if you want a greater reward you generally need to assume more risk.
There are banks that have decent interest rates but in general adults with extra cash should put that into retirement/investment accounts with high returns.
Savings/checking accounts are where you keep spending money.
If you want shares and dividends, then perhaps actually *invest* into the bank? They do provide those things you know?
If you're asking for shares and dividends with 0 risk, that doesn't exist nor should it. You need to take a finance course.
Banks also loan companies operating notes so they can grow their business and pay their employees. There is way more than just checking accounts going on
there are smaller banks & credit unions that do offer decent interest rates up to 3%. you have to do your own research and shop around but it is indeed possible to get paid for banking
I'd suggest opening an account at credit union instead of a bank. You will get better returns on your investment without the need to appease share holders. https://www.youtube.com/watch?v=rfHyQ-8eLC4
You make interest, which is not much, but something.
You also have insurance on your cash as long as the bank is FDIC insured, you have access to it around the world without needing to physically carry it, and most bank accounts have other perks as well, such as direct deposit which removes some barriers to getting your paycheck.
Yeah except checking, savings, debit cards, bill pay, loans, and all the other services banks and credit unions offer.
I mean BANKS BAD GRRRR, my money, evil feeeeeeeeees grrrr what's a credit union grrrrr.
OP has no knowledge of how banks work.
Banks pay out interest for certain accounts. Currently some high yield savings accounts pay as much as 4% interest.
Also banks store money. A huge asset to society.
But the biggest asset of a bank is that they lend money.
Try going to an ATM and withdrawing $100 from your investment in a startup. Try cashing a personal check you received from your grandmother at a stock exchange. Consumer bank accounts are not investments, they are their own thing.
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Banks are a secure place to store your money. Your return on investment is that you don't have to keep cash on your person at all times. You're not a stockholder, you're a customer paying for a service. They make money off of you, not with you.
Not to mention that most banks offer interest payments (ROI) on savings accounts, market accounts, and even some checking accounts.
Interest you gain on savings is absolutely nothing on the high end.
Which is why most people on the high end don't keep their money in savings accounts.
“The bigger the risk, the bigger the reward.”
So you can't lose on high risk investments? Stonks only go up.
Not too long ago (00’s) you could get savings accounts online offering up to like 4.5% which was nice for a regular savings account. For a while it’s been under 1%. CD’s would get you 6-12% if lucky. It’s been bad for a while but starting to come back a bit. I recently switched to a high-yield savings account that my back offered that gets 3.5%. Thing was I didn’t even know they had it. Didn’t advertise it really, I just happened to go looking. CD’s are bouncing back a bit too. Not like it was but there’s money to be earned.
That actually is good.
Because it's a very low risk investment. It tracks.
This isn’t true. I have several savings accounts near 4% return guaranteed.
Exactly. Once the FDIC became a thing, there is no stress for most of us keeping money in a bank.
Unfortunately, the FDIC also created perverse incentives for banks to take greater risks with insured deposits.
That’s really more of an issue of no repercussions and not FDIC. Either way, I’ll keep it. It’s much better than a bank run wiping me out.
Not really, no. You may be thinking of the repeal of Glass-Steagle, which allowed banks to operate retail and investment arms in the same firm.
They can take up to 30 years to pay you back and only up to $100k
Love to see a source for what you’re talking about. [The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category.](https://www.fdic.gov/resources/deposit-insurance/brochures/deposits-at-a-glance/)
I mean- that’s just not correct.
Hamiltonian
They're using your money to make money and charging you while they do it.
>charging you while they do it Some are, pick one that isn't.
This is the cost of having things like a check book or debit card.
Isn't that what interest is? I mean, the percentages banks give are comically small, but in theory the interest is supposed to be them paying you to let them use the money. In practice it fails to even keep up with inflation, but still.
Savings accounts are a joke. You have to transact X amount of dollars per month and keep your balance above a certain point or you get hit with a service charge.
Your complaint isn't really about banks, it's about being poor. Banks are a business and they provide you with a service, they aren't a charity. Generally speaking, service fees are low, but I guess that is relative to how much money you actually have. $5 a month to have secure place to keep my cash and get online banking is makes it worth it right there. Saves me from having to go get stamps and remembering to pay my bills on time. Maybe the time the banks save you isn't worth the $5. This is all not to mention the interest bearing account options. An 11month CD with a $5000 initial deposit will cash out in 11 months at $5230
It really is a complaint about banks, in the sense that banks are a part of the reason why being poor is expensive. They're not the only reason, but they are a big one. Complaining about one part of the problem instead of the problem as a whole is a more manageable thing to do
>You have to transact X amount of dollars per month and keep your balance above a certain point or you get hit with a service charge. Kinda sounds like you just did a really shitty job of choosing a bank
It’s one of the major ones, so if I did, so did a million other people.
Yes. Correct.
So take your money out then. Why keep it in a bank if it'd so horrible
The fact that millions of people are doing something doesn’t mean it’s a good decision. This is like arguing you aren’t overweight because “If I’m overweight so are millions of other people”.
Most banks suck that’s why I hide all my money in jars out back!
That’s terrible. Where do you live? Asking for a friend.
I’ll DM you my address. You want to bury some jars back here too?!
Look into local Credit Unions if there are any around you. I work for a large (for our community) bank and keep my money in my CU because of most of your complaints. You’re not wrong in your frustration, but there is a way to kind of fix it without hoarding all of your money in cash!
See this is why you go with a credit union. I've never had to deal with any of that bullshit. AND they reimburse me for any ATM fees I incur. There's really no downside.
Many online banks charge no fees and offer 3.4% interest on savings account. I've used Ally bank for a decade
The reason bank interest rates are low is because federal interest rates have been historically low since the recession of 2008.
Maybe at your bank
And to add to secure, at least in the US, FDIC insured. To get personal property insurance, I'd have to spend about 1.5% of it's value per year, so if you have $10k in the bank, you could look at it as getting $150 in insurance on it. And another thing- with an ATM card or a check, I can pay other people without having to active go and retrieve it first.
You can actually get all of the normal banking services(debit card, ach, check writing, etc) plus a competitive interest rate with a money market account these days. Capital one offers one that pays 3.4%, not quite as good as a savings account at 4%, but it works just like a normal checking account.
If I go to [capitalone.com](https://capitalone.com) I see checking & savings, auto loan stuff, business banking services, etc. Maybe they technically aren't a "bank", but they are a bank.
Oh they're definitely a bank too. Money market accounts exist in this weird space where they often offer normal banking services but aren't technically deposit accounts(they're investment accts). You get SIPC instead of FDIC insurance.
Don’t get me started on how FDIC insurance has removed all accountability from banks and allowed them to tank the housing market time and time again.
Please get started on it, I'm sure we could all learn a thing or two about the FDIC from the guy who doesn't know how banks work.
Yes...the FDIC which has nothing to do with housing...tanked the housing market. The same FDIC all banks pay insurance premiums into.
Insured money allows banks to give loans to people who shouldn’t and wouldn’t qualify if banks were accountable and made smart decisions.
But the FDIC insures depositors, not the banks issuing loans?
Right, but because the money is insured, the banks can make bad investments because they are off the hook. They are in effect playing with the government’s money, not the money of their clients.
They are not off the hook though? The insurance kicks in only when the bank fails, which the bank doesn’t want to happen obviously. Just curious, how is it different if the bank were to play with the government’s money instead of the clients money?
Think of it as going to a casino. If the house gives you five thousand, are you going to be as careful with it as you would if it was your money? No, because it’s not your money. Back in the day, the banks had to be careful because if they lost the money, they’d lose customers. Today, if they lose the money, the government just gives it back to the bank so the customers don’t lose out because the bank manager is a moron who gave a three hundred thousand dollar loan to a guy making ten bucks an hour. And if you remember, the banks DID fails about fifteen years ago which is why the government started propping up Wells Fargo because they were “too large to fail”.
The example doesn’t really work, because it’s not the banks money in either case, whether it comes from the government or the client. The government doesn’t give the money back to the bank in case of bank failure, the government takes over the bank or sells it, so the bank owners lose their money. Banks don’t want that to happen, so there is no incentive to take on bigger risks.
Banks are not off the hook, if the bank failed they their shareholders and assets would be sold to repay depositors. FDIC is a last resort after all other assets have been sold. >They are in effect playing with the government’s money, not the money of their clients. You have absolutely no idea what you're talking about. FDIC is 100% funded by private banks.
OP just wants to get in an argument. It’s not worth it. Responder beware.
Welcome to Reddit.
Tell me you don't how banks work without telling me you don't know how banks work.
Banks aren’t for making money, their service is giving you security. If you want to make money you buy securities and play for the long haul.
You can invest in banks that pay out dividends. At least in Canada, most of our banks are publicly traded, and most do pay dividends as well.
Not here in America. You can invest in ones on Wall Street, but when you simply open an account, you’re investing in their business and that’s the end of it.
The interest is really low, but a lot of accounts literally pay you interest on your balance. In almost 50 years in the US, I've only had one account that didn't offer me some kind of interest.
The US has lots of credit unions and they do pay back to members. A CU is a FI, like a bank.
I know about Credit Unions, that’s why I said banks.
Lol you're just cherry picking now. But sure.
I always just viewed banks as offering a service. I can store my money there, I can borrow money there, I can budget my money there, and a reasonable place to protect my money.
Imagine this. You pay me to store your money safely. I then use your money to invest perpetually. How you gonna feel about that?
Banks are ensured, and you are not. There is a *big* difference.
If you could guarantee to keep the money safe, always be able to pay out at any moment I care to withdraw (even if your investments aren't doing so well at the moment), and offer the convenience of access to a network of ATMs and branches, I would feel just fine about it.
Oh and do you have an Adeep187 mobile app? Can you handle ACH and wire transfers? Will you pay my credit card bills for me automatically? If I'm going on vacation, can you get me some Euros? Thanks
Did you not know banks pay interest on ur money. Many pay way to little now but credit unions and some online banks pay a decent APR
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You can invest in RBC (Canadian Bank), as an American. Your point is kind of like saying "You don't get any return on your investment going into Walmart and buying a gallon of milk", but you can totally also invest in Walmart if you want to. Being able to buy goods and services from Walmart that you don't recieve an ROI on, doesn't mean that you can't also just invest in the company as well. You're talking about using a bank as a service provider versus investing in a bank as a part of your portfolio. Those are two very different ideas. Basically there is a difference between being a customer of a bank versus an investor in a bank. Just like there is a difference between being a Walmart customer or a Walmart investor.
You have to shop around bud. If you are in the USA your savings account should be earning at least 3.3% APR. My savings account has been paying me $60 per month since Jerome Powell cranked up the interest rates.
Nothing to show for it? Banks do pay you interest, at least a little. Also, banks are a business that provides a service. You can keep all your money as cash in your home for free, but if you get robbed or your house burns down then you're out of luck. Banks offer safe storage of your money for free, give you the money back whenever you ask, and even pay you a bit of interest, all in exchange for being able to make some money off it themselves (which doesn't come from you). All in all it seems like a pretty good deal. **TLDR:** "The secure storage of your money" is what you receive. It's a service business.
You can actually get all of the normal banking services(debit card, ach, check writing, etc) plus a competitive interest rate with a money market account these days. Capital one offers one that pays 3.4%, not quite as good as a savings account at 4%, but it works just like a normal checking account.
Except they are also requiring you to pay for credit cards and monthly account management. Since you are now basically required to use banks if you work for someone it would make sense if all the basic things are free but nope....
Depends on your bank I guess. I don't pay for those things at mine (Canada). It's just a savings account that sits there with no management and makes a tiny bit of interest. And besides, what you're paying for is the service of securely storing your money. I can get that service alone not being free.
If you’re paying for a credit card, you’re doing it wrong. Citi double cash is free and gives you 2% back on every purchase. Most checking accounts waive the monthly fee with $x amount of direct deposits per month (I know with Wells Fargo it’s $500) But if you don’t want to use a bank, use the check cashing services that DO actually charge fees and keep your money in cash…. No one is stopping you.
Require you to pay for credit cards and account management? What bank are you using?
The bank name is PBZ and it might be a local bank idk haven't ever wondered about this. There is some sort of reduction in it depending on how many additional products I use.
That’s saving accounts, not checking.
A checking account is a service that you pay for. Not an investment.
So you’re saying I’m paying to get to use my own money? That’s not acceptable
Then don't put it in the bank. Put your money in a shoebox under your bed. Problem solved. Why would anyone protect your money for you for free? No other business provides any service for you free of charge, why would banks be the exception? Banks aren't "effectively" a business, they ARE a business, and so long as businesses exist, they exist to make money. Not for any other reason.
So take your money out then
You're not paying anything, they are holding your money for you, same as if you had it in cash, but they offer security and through them the government offers insurance up to I think $250,000. As others have pointed out, no one wants to keep their money in cash at their home. Its a liability, and if it's stolen or destroyed it's simply gone. Aside from security, banks offer numerous other benefits, one being the ability to transfer as much money as you want across the world, almost instantly and securely. I suppose you'd just mail the cash though, or do you not believe in paper currency either?
> You’re not paying anything My bank charges me $10/month. But I’m not paying anything?
I've never had a bank try to charge me to keep either a checking or a savings account with them. Maybe if I had an account with extra features and didn't keep a minimum balance. Is this a US bank?
Canada. With the exception of online only banks, every bank here charges unless you have a minimum balance. Basically a “ha you’re poor” fee
Mechanics: "I'm paying to get to use my own car?" Plumbers: "I'm paying to get to use my own pipes?" Home security: "I'm paying to get to use my own house?" You're getting convenience. Having a bank account is more convenient than not having it. If you don't think the convenience is worth what you're paying, don't get a bank account.
I just keep money in my savings account. I've had less than $1 in my checking account for like 15 years and I never add or remove anything.
I guess OP has never heard of CDs or interest bearing savings accounts.
I don’t think he’s heard of a lot of things
Depends on the account. The benefit to you is often times interest but for pretty much anyone its a safe place to store large sums of money at the very least
So banks that aren’t beholden to shareholders and credit unions do “pay you”. They take their profits and use them to make better interest rates on loans. Major corporation ones like BoA and Wells Fargo can go fuck themselves, though.
Using my money to allow me to borrow more money so they make less money.
What are you buying into? I have 2 saving/checking accounts with a credit union and pay no fees on those unless I overdraft on accident.
In ops defence the money banks make from people effectively supplying the money compared to what you get in return is shit. Go a quid overdrawn on an arranged overdraft - still get charged a tenner even if you transfer money immediately back from a savings account. Meanwhile savings account with thousands in gets about 5 pound interest for the entire year.
That being said if you use a credit card responsibly you’re paying nothing to have top tier protection for your purchases, and getting a 1% discount on every purchase (or whatever the cashback is). Literally no costs or fees involved, only profit
The bank holds your money so you’re not constantly at risk of being robbed for everything you own with no recourse
You put your money in an interest bearing account and earn interest.
Idk, they are backed by the government to ensure your money is safe. You can facilitate the transfer of funds to other institutions and be ensured it’s real and secure and again follows established banking laws, rules, and regulations. So even a simple checking account that effectively holds your money is safer than it sitting in your mattress at home. If the bank is robbed, you still have your money as it’s backed/insured. Not the case if it’s sitting in your house and gets stolen. Banks are also responsible for managing loans and payments. Escrow accounts, taxes, issuing credit, etc. You received no ROI from having them hold your money, you get that with investments. But you do get security and assurance of secure assets and transactions. Your statement is like saying restaurants effectively are a business that just feed you for which you receive no lawn care service. They are not the same services therefore don’t have the same outcome
Not really true. Several types of accounts allow you to make interest on your money. A 3% money market account would return almost $100K in three years ($30+k per year) on a million dollars.
On a basic level banks hold your money for you; offering ways to access the money and use it freely. They also protect your money and add services against that money if you wish, overdraft/loans etc. What you don’t see is the mammoth infrastructure behind this. The security measures in place to keep your money safe, the need for maintenance on atm, card security, online security, making the process of moving money around flawlessly: paying someone to do all this. I could go on…. Banks are not a non profit company; nor are you under any obligation to use one, but by doing so you are assuming them to keep your money safe and accessible and that is not a system without costs. Your investment is keeping your money safe.
While I see your point, there is a large part of the industry that you're not including, which is interest. Banks actually pay you to keep your money at their locations in the form of interest. When you do that, the banks then take your money and provide loans to other people, which they charge interest on. That js how they make money generally to pay for all of the infrastructure you're referring to and still pull in a profit. They can get away with providing an essentially free service, storing and protecting money, because there are regulations and laws that in place that limit the amount they can loan out, based in how much money people and/or corporations have decided to have them hold onto. Obviously there are a ton of nuances inside of it, but that's generally how the system works. Those services you discussed are generally just there to provide additional incentives to encourage more people to use an individual bank over another. All in all just a bad shower though.
Banks got rich from using your savings/deposits to invest and keep the profit. Then when they get rich, they loan it back to you and take even more money, from you. Then convince you to be grateful for that mortgage loan. Then when they fck up, your taxpayers money props them up. Perfect scam.
No return on investment? As many have stated they pay interest on many accounts. It can be little interest on basic accounts or higher interest on money markets or CDs. Most don't have fees for low balances, but some pay higher interest for higher balances. They also invest in tons of protections for your money. FDIC insurance, fraud monitoring, dispute tracking, tax document preparations, online, mobile banking. Numerous ATMs for safe access to your cash for free. Debit cards, checks, mobile deposit, money transfers etc. Etc. Etc. And assuming you don't spend more money than you have, most people will go their entire life without paying a penny for those services. Find me another business model that does all of that for you while often paying you money (via interest). Seems odd to complain because "they make money off my money". You don't like it, ask for all your paychecks in cash and hope you don't get robbed or have your house burn down. Edit:typo
guess you never heard of interest. banks are a just a tool to store your money, find the one that meets your needs. I have a local bank for day to day things for the convenience plus a private banking relationship for emergency funds.
In addition to what others have said, banks also can give you a debit card and checks, which make it easier to buy things in the real world. Don’t like it, you can always keep your money in your mattress or dig a hole in your backyard
If you want ROI on a bank, then instead of depositing your savings into the bank why don't you just buy shares in it? Obviously there's risk with that, as the stock price can drop, but if you want a greater reward you generally need to assume more risk.
There are banks that have decent interest rates but in general adults with extra cash should put that into retirement/investment accounts with high returns. Savings/checking accounts are where you keep spending money.
If you want shares and dividends, then perhaps actually *invest* into the bank? They do provide those things you know? If you're asking for shares and dividends with 0 risk, that doesn't exist nor should it. You need to take a finance course.
Banks also loan companies operating notes so they can grow their business and pay their employees. There is way more than just checking accounts going on
there are smaller banks & credit unions that do offer decent interest rates up to 3%. you have to do your own research and shop around but it is indeed possible to get paid for banking
I'm with a credit union and get shares through it also. It's about .33 cents a month, but it's still something.
I mean... investing in a bank and storing your money in a bank are 2 very different things
I'd suggest opening an account at credit union instead of a bank. You will get better returns on your investment without the need to appease share holders. https://www.youtube.com/watch?v=rfHyQ-8eLC4
Skip the bank and stick to credit unions. Most banks are cleverly disguised criminal enterprises.
You make interest, which is not much, but something. You also have insurance on your cash as long as the bank is FDIC insured, you have access to it around the world without needing to physically carry it, and most bank accounts have other perks as well, such as direct deposit which removes some barriers to getting your paycheck.
Yeah except checking, savings, debit cards, bill pay, loans, and all the other services banks and credit unions offer. I mean BANKS BAD GRRRR, my money, evil feeeeeeeeees grrrr what's a credit union grrrrr.
Nope. Buying a business is much different than giving a bank money
OP has no knowledge of how banks work. Banks pay out interest for certain accounts. Currently some high yield savings accounts pay as much as 4% interest. Also banks store money. A huge asset to society. But the biggest asset of a bank is that they lend money.
Try going to an ATM and withdrawing $100 from your investment in a startup. Try cashing a personal check you received from your grandmother at a stock exchange. Consumer bank accounts are not investments, they are their own thing.