>> People just give them money as a business model.
You dont actually give them money...you loan them money when you do a deposit. That is why they pay you interest, and that comes with the risk of loans to another party.
A little detail they are happy to omit and they are happy to let people talk about: "I have money in the bank", that you of course ...dont have.
At least in the US most banks are FDIC insured so your first $250k or so in deposits are secured by the government.
There's no real risk involved.
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The interest rate banks pay you has been 0% since before covid
That's definitely not universally true; my US bank pays 3.2% interest on savings
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This is a thread about a EU bank, and banks in the EU both have some standard interest rate on savings accounts, and moreover might offer time-restricted savings accounts with an even higher rate. That said, they track poorly with inflation compared to actual investment.
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Ally has been 2% from before Covid and currently is at 3.2%
Zero is also a number, although not all Mathematicians accept that. 0% interest does not change the essence of the monetary relationship with your bank, or the risk profile.
My bank in the uk pays me 3%
I have been able to easily find a US bank that pays roughly SOFR minus 25 basis points for FDIC insured savings accounts, even before 2020.
isnt it the opposite in parts of the EU? you pay interest on the deposit
I don’t know of any bank that hides the fact they lend out money. Most pretty actively advertise it.
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