3 ms·
> depositing funds in a bank is considered risky behaviour? of course it is, that's why the bank pays you interest on your deposit. They loan out what you depo
by chasd00 8mo ago
> depositing funds in a bank is considered risky behaviour?
of course it is, that's why the bank pays you interest on your deposit. They loan out what you deposit at a higher rate and collect the difference as profit. If that loan defaults then your money is gone because the bank was never able to collect it back. FDIC was invented to insure your deposit up to 250k so you're protected (up to 250k) in case that happens.
- bpt3 8mo agoNo, the bank pays you interest on your deposit to entice you to deposit money there so they can lend it out. There is literally zero risk involved (other than something on the scale of the collapse of the US government, which no one is really considering here) because of the FDIC, and yet interest rates on FDIC protected assets are not 0%.