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Unless you keep your money in a jar under your bed or a safe, you probably utilize the services of a financial institution. We rely on banks to store our money in savings or checking accounts, borrow funds for major purchases, and easily access cash on a daily basis. While the services that these major financial institutions provide may seem relatively straight forward, have you ever wondered how they make profits? We give banks our money everyday, and we trust that our funds will be kept secure and easily accessible. Many already understand that these financial institutions are entities designed to make a profit. If you've only used a checking account, savings account, or ATM, it may seem unclear how these businesses make their money. Of course, you've noticed the fees that you are charged for using your debit card or for having an overdraft in your account, but the fees are not the main source of profit for these institutions. While they do pull in a great deal of money from them, banks make the majority of their profits from offering loans. Essentially, when you deposit your money into your account, that money goes into a pool of cash controlled by the company. Those funds are used to provide loans to customers. From college tuitions and buying homes to building businesses, lenders give loans to people for many reasons. Borrowers are charged an interest rate on the amount borrowed. This rate can differ depending on a variety of factors, including the amount being borrowed, the purpose of the loan, and the amount of funds that the institution has to lend. As mentioned earlier, banks also make profits from the fees they charge. Although most of these institutions earn profits from interest rates charged for services, many fees contribute to their overall profit. Account fees are charged for "maintenance" to a customer's account. ATM fees are among the more common fees that banking customers encounter everyday. Many banks offer their own ATMs throughout a given region, and a customer may or may not have to pay a fee to use the machine. However, if a customer wishes to access funds via a third-party machine, there will be fees charged. These fees can range from one dollar to five dollars, per use. Overdraft charges are another common fee that customers must face. These fees are charged if a customer places a transaction on a debit card or check, but the funds in the account are insufficient. Banks have many ways to gain their profits. Are you looking for banks in Bound Brook, NJ, that will protect your savings? Visit our site to learn more. http://www.somersetsavings.com/home/contact/hours/bound_brook.
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