Thursday 6 August 2020
How do banks work?
How do banks work?
Do you have a piggy bank? You probably do how else will you keep your money safe when you lose a tooth or when it’s your birthday but when you grow up you will have to open a bank account because your piggy bank won’t be able to fit all of your money and you need to know how to use a big bank account that has a lot of bucks and what the bank does to your money.
Congratulations you opened your first bank account now you deposit some money into it yay but the banks take a little bit of money each year but don’t worry you actually get more money back this is called interest. Let's say you deposit 150 dollars. There's a reason you got a job to earn money.
Let’s say for example the bank gives your money to someone else let’s say Bob wants 50 dollars from the bank and the bank takes it from your money but Bob has to pay it back this is called a fee
But Bob has to pay it back but with a 7 percent interest so the bank gets five per cent and you get two percent so now you have 52 dollars and the bank gets 5 percent so it’s a win-win for you and the bank and you get it every year.
So now you go to your nearest bank and open up a bank account and save you money and don’t worry if you think the bank is going to rob you they have billions of dollars so they won’t stell none of your money now I have to go back trying to rob this bank what do you mean there’s only one dollar in cash were did all the money go “online” nooooo.