Anyone else notice that banks, the place that needs money more than anyone to do the business of money, does nothing to encourage savings? I mean, well, they do give it lip service but that doesn’t really count.
A bank is a place to put money, to store it or save it. That’s what they were originally created for. It was safer to have it stored in one place where they could keep it safe and then when people needed it they could go there to get it out.
As time went along, the banks figured out they could make money by loaning out the money people deposited with them and then charging interest on the loan, thus making it a profitable venture to store money.
As banks increased the amount they loaned out, they needed more and more people to “invest” with them and they used the new capital to loan more money out. It’s a bit of a vicious cycle, but it makes sense for all involved until…
…until it didn’t make sense to put money in the bank any more.
The interest rate you get from the bank on the money you put in the bank is almost nil. Like far all intents and purposes, it is ZERO. So, what is the benefit of putting money in the bank? Sure, there is the convenience of not carrying around piles of cash or pounds of coins, but is that all?
Banks need capital. You think they’d do something to encourage people to put there money there. I actually deposited a rather large amount of money in a bank that was giving an outstanding rate on CDs (Certificates of Deposit). That’s how a bank should generate capital.
They seem to take for granted that they are just guaranteed business, which maybe they are. Maybe consumers pay no attention at all to the fees or benefits they get from bank to bank, but it does pay to shop around and give business to banks that actually benefit you rather than just use you as an endless supply of currency to feed off of.
We need to be better consumers and actually cause the banks to fight for our money. Let’s bring the competition back and make them beg for our money instead of letting them tell us what we can do with our own money. Make sense?
Who’s with me on this?