Discover Chief Earning Sources of Bank

Bank is an institutional organization which not only takes care of our money but also provides quality financial services. Bank keeps our money safe and also yields interest on it. But, how bank run its business while it charge nothing for depositing money? One of the chief earning source of bank is loan interest. Actually bank allows peoples to get loan at some interest. It invests in various streams to acquire better return - like equity, reality etc. Banks also do provide insurance services nowadays. Banking is also a business like other profit earning institutes. Banks do job of money with its customers. It gets the money and gives the money and meanwhile it earns a good amount of money.

Initially people deposit money into bank and it commit to give them some interest on their deposit. This interest rate depends on a specific time period. For instance if one deposit money for ten years and in bank terms interest rate is ten percent then bank responsively put your ten percent separate. And now bank will contribute loan to other people at higher interest rate. This is a process where bank earn a good sum of money.

All kind of loan come up with the primary and important earning sources of bank. But still there is many other substitution of gain. Banks lends money to people on the security of their precious stuff. Sometimes peoples are not able to pay its loan amount on time. In that condition bank can acquire their valued stuff and auction them.

Banks also earn money by investing in Equity market. Today a bank provides lots of services like trading, money transfer, net banking, online shopping etc. It charges money for these services.