Question

7. Can you identify the reasons why banks give interest on the deposits made by people?

Answer 1

Answer:

Banks use the money deposited on savings accounts to lend to borrowers, who pay interest on their loans. After paying for various costs, the banks pay money on savings deposits to attract new savers and keep the ones they have. The difference between the money earned as interest on loans, any operating expenses, and the money paid as interest to savings accounts is profit to the banks.

HOPE YOU LIKE THE ANSWER,

MARK ME AS THE BRAINLIEST

Answer 2

Answer:

HERE IS YOUR ANSWER DEAR..

Explanation:

1. The business of banks totally dependent on the deposits.

2. Banks keeps a small portion of deposits as cash with themselves.

3. Banks use the major portion of deposits to extend loans.

4. Banks charge very high interest of the loans given to the borrowers. This is the main profit of Banks.

5. There is a huge demand for loan for various economic activities. Banks need money to meet the loan requirements.

6. Just to increase the funds and to attract the depositors, banks give interest on the deposits made by people