How Banks Work [Explained in 1 Minute]

People accept that banks exist, but what they don’t always appreciate is how they might make money 💲💲💲
Banks tend to have two arms 💪💪 to them, they have the savings 💰side and they have the mortgages 🏠 side.
You as a saver, you’ll put your money in the bank account and you’ll get an interest rate of about 1% at the moment.
And on the other side of the bank, they are lending that money out to people to buy houses in the form of mortgages. And they are charging those people say, 3%.
The way they make their money is the difference between what they’re lending their money out at (the 3% to the mortgages), and what they’re paying you (the 1% in savings), so it’s the 2% difference between the two, that’s their profit..🤯
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