How Banks Work

[dennisovesney]

That 10% interest turned into 20% right in the shirt

[nikolaossofos]

Thats why you pay contracts. Meaning that if you want to get a 10% increase in your money you sign that you will not withdraw them for the next year so the bank knows they can use them

[mintycockroach]

Don't forget the bank also has to pay back THAT 10percent intrest they got

[THESandyCarrot]

If the person doesn’t pay:

Guy: but my $500..

[johnjohnerd]

Banks can only take 90% out of an account at a time.

[grass]

It works like that because money in an economy always has to be moving in some way so they give loans from other accounts and charge interest to make money while still having the accounts money

[mightydestroyer]

Btw just so everyone knows, its a common misconception that taxes are mandatory, they are actually optional

[non-binarysimp]

The way my fucking math teacher talked to us about this today and I got this video on the same day is kinda crazy

[phcokhaver]

As long as they don't lose it idgaf

[lem]

Now, we just need to gather as many people as we could to withdraw all at once

[westaussiebrumby]

My account in Australia give me over 8% interest

[wassitYT]

What this guy doesn't know is that you have to pay the bank to keep your bank account open

[FootballAbdelrahman]

Dad: I’m gonna get a bayern shirt for mane and Liverpool shirt for salah me: dad you didn’t hear they got deleted

[hackermangage]

And that’s why we have had multiple recessions. Banks are greedy. Never trust one. If you can do a credit union

[SnSBullDorYT]

What is he wanted the 500 back when the bank doesn't have 500

[Guy_Sandler]

Technically you are giving the bank a loan, sometimes with no interest

[Liam_sw]

isn't it weird that the same day that the guy returned the $5OO the guy to deposited it needed it back????

[Sidicas]

No, that's not how banks work. They work on a 10% fractional reserve system which means that for every $500 that somebody deposits it unlocks the ability for the bank to create electronic money out of nothing and give ten $500 loans to 10 different people that same day as the depositor that put the money in. Those 10 people then transfer it electronically to other electronic accounts to pay their bills so the actual cash doesn't even exist. It's just theoretical/electronic. The banks get an endless supply of physical cash from the government printing it, as well as a government guarantee that all deposits will be covered by the US government if there is a run on the bank and depositors withdraw more electronic money from their accounts into cash than the bank actually has. All the physical cash in the USA can't even pay for a tiny fraction of the total amount of debt / loans that American citizens hold in the USA.

[yousifsaoor]

This is also how the Great Depression happened

[tiky]

Anyone else see only 4 100 dollar bills instead of 5?