what happens when you put your money in a saving account?

What happens when you put your money in a savings account at the bank?

The money you save in a bank is the same money used by banks to lend to borrowers.

For example: You currently have an emergency fund of 10,000 in a high yield savings account, that may pay a 1.50% APY.

The bank will then use that money from your account and several other accounts to fund someone’s:

• Mortgage at 5.50% APR

• Student loan at 6.65% APR

• Credit card at 16.99% APR

Your bank may have paid you $150 in a year’s time but they earned hundreds or thousands more from the interest on loans (made possible with your money).

Banks are able to earn a significant amount of money from the interest charged to its borrowers since it's only paying out on average 1%-1.5% (APR)

Source: https://www.moneyunder30.com/