When you walk into a bank to withdraw money or to take out a loan

When you walk into a bank to withdraw money or to take out a loan

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When you walk into a bank to withdraw money or to take out a loan, the reverse of the  process outlined above occurs. If the first bank does not have enough money in the  vault to cover the withdrawal or the loan, the first bank goes to the second bank and  withdraws money. If the first bank does not have enough money in its account at the  second bank, then it must take out a loan at a lower rate of interest than the loan that it  will eventually give to the individual borrower. In this way, a bank is able to accept  deposits, honor withdrawals, and make loans without having to maintain all of the  deposited cash on hand in the vault.  How do banks make money? As financial intermediaries, they earn enough to support  their activities by the difference between the interest rate paid to savers and the interest  rate charged on loans. When customers make deposits in a savings account, they earn 
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When you walk into a bank to withdraw money or to take out a loan

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