Question

why do banks encourage people to keep their money in bank?what advantage does the bank get from this?

Answer 1

To encourage people to keep their money in a bank, the bank will pay them a small amount of money (interest). This interest is paid from the money the bank earns by lending out the deposited money to other customers. ... The banks lend money to customers at a higher rate than they pay to depositors or than they borrow it.