HOW BANKS MAKE THEIR MONEY

Banks are never short of come-ons to attract new customers; some banks offer free checks, cash rewards, or iPods (to name a few) for new depositors. Bank makes money from it direct and indirect costumers, reviews from various websites, for example,Norskeanmeldelser state different means of how some bank make their money. Here are how the bank makes its money.

Deposit fees

Checking accounts, savings accounts, and credit cards are some popular financial items that charge fees. While holding these accounts costs banks relatively little, these fees are said to be for “maintenance purposes.”

Fees for ATM’s

There will be occasions when you are not able to locate the ATM for your bank, and you must settle for another ATM to get some cash. Okay, it might cost you 3 NOK. These circumstances arise all the time, which means more capital for banks.

Commission

Many banks, take for instance Santander, you would have divisions of investment that also serve as full-service brokerages. Of course, their commission rates are higher than other discount brokers for doing business.

Interchange

If you buy anything at a store using a credit or debit card, the retailer usually must pay what is called an interchange charge. Much of the interchange fee goes to your bank, and some will go to the bank of the shop. This exchange fee is for the management of credit and debit processing expenses. Credit card firms set tariffs for the interchange. Interchange fee rates can differ by the provider, among other factors, but the way they are organized is that they are a percentage of transactions plus a flat rate.

Levying interest rates on loans

Customers are trying to look for innovative ways to realize their dream vehicle, house, and many other materialistic desires with increasing levels of ambition. A bank loan is one of the most straightforward and uncomplicated ways of achieving the dream. There is a wide variety of loans on offer to invest in securities, from home loans to car loans, personal loans, travel loans, and loans. The bank levies varying degrees of interest rates on various types of loans, depending on the length of the loan and the amount of the loan.

Interbank loans

Another prevalent method of earning money for a bank is through the interest rate received by inter-bank loans. In simpler terms, it means that a certain amount of interest is charged on it when one bank lends money to another bank. It goes straight into the account of funds raised by the bank for its successful operation and faultless sustaining. One of the most important reasons for maintaining this service record is the steady fund inflow, which attracts additional clients.

Charges for vault

Many of us are afraid of keeping our expensive jewelry, vital documents at home. The theft danger makes them anxious, and all these customers profit from the bank ‘s support. They have vaults of various sizes and dimensions to match the needs of several different customer groups that need these vault services.

Asset Auction: Often, when a person or a business defaults on a specific loan, the bank insists on the collateral that has been granted in return for the value of the loan and puts it up for auction. This may include a wide variety of items, including jewelry, from houses, vehicles, and other personal belongings.