Question

When do banks make money from deposits?
A. people withdraw money from their account
B. when banks pay interest to account holders
C. when people add money to their account
D. when banks loan the money to another consumer
The answer is not C

Answer 1

I believe the answer to your question is D. when banks loan the money to another consumer

Answer 2

The correct answer is D. When banks loan the money to another consumer.

Banks earn profit by lending the money from customers who deposit to bank or borrowed from other banks by lending it at a higher interest rate than the amount the borrowed it.

Banks pay low rates to those deposit with them those who their money is in money market fund or in savings account, and charge high rates to those who borrow as loan.

Some of the risks that a bank faces include operation risk, market risk, reputation risk, and liquidity risk.