What banks earn and how uses services of a bankPosted on: May 5, 2020, by : cashadmme
Everyone uses the services of a bank: they receive a salary on a card, take loans, and keep money on deposits. Like any company, banks make money on customers. Let’s see how banks make a profit and what you can learn from them.
Suppose you opened a deposit in a bank. You are calm about your finances: they are in a safe place and profitable. Entering your personal account on the bank’s website, you observe the growth of capital. After a year, take off the amount to which another 10-11 percent has grown. Everything seems to be pretty good. Now let’s look at the situation from the perspective of the bank.
The bank transfers all customer money from deposits to its own transit accounts. Therefore, displaying your account in the Internet bank is just numbers, not real money. The bank uses real money to make a profit. Each client of the bank can use their money at any time: to partially or fully withdraw the entire amount, but such a need is only 20 percent of all consumer assets. The remaining 80 percent is excess liquidity, and the bank conducts operations with it in order to make a profit.
- The bank will invest part of the money in the business. It will open new offices, launch advertisements to attract new investors, and issue salaries to employees.
- The other part will be issued in the form of loans. The interest rate on loans will be approximately 2 times higher than the interest rate on deposits. The maximum deposit percentage for 100,000 rubles, taking into account the fact that you will not touch this money for a year, is 10-10.5% per annum. The consumer loan rate on which the bank earns is 19% on average. In the most sad cases, it reaches up to 40-50%.
- The bank uses part of the money in repos. This is a short-term loan secured by securities. The bank gives such a loan to traders for one night. The source for the loan is excess liquidity. This is money in the accounts of depositors that customers did not withdraw during the day. A trader receives a short-term loan from the bank, trades on the exchange, earns profit, and returns money to the bank in the morning with interest.
- The bank will invest part of the money in stocks. Banks are offering large clients trading on the stock exchange through their intermediation. The bank itself cannot trade on the exchange; it trades through a brokerage company. Therefore, if a client buys securities through a bank, he loses a part of the profit: it goes to pay commissions to the bank, management company, broker and exchange.
Therefore, it is more profitable to become a trader and trade on the exchange without intermediaries. Then the profit is yours.
Putting money on a deposit
Over the past year or two, the situation is such that putting money on a deposit is risky. If the license is revoked from the bank, the depositor has to be nervous to get his insured 700 thousand rubles. And if more was invested?
Another thing is the stock market. Even if – the case is unprecedented – the broker ceases to work, the shares remain with the investor. He simply changes the broker and continues to trade on the exchange. In this sense, the trader does not risk anything.
Yes, the stock market is often unpredictable. And there is a risk that the shares will “collapse”. But many investors see this as a plus, because a fall usually follows growth. Therefore, experienced traders monitor the fall and buy cheaper stocks in order to later win on their growth.
Periodically, there come times when stocks begin to “uncontrollably” grow, giving good opportunities. In order to catch this moment, you need to have money in the exchange account. Therefore, it is better to prepare in advance, learn to trade on a demo account (brokerage company “Natraider” opens such an opportunity) and then open a real account on the exchange. So you understand the features of the stock market and do not miss the chance to make money on stocks.
How to become a trader
It’s not difficult at all. To verify this, just go to the Tradernet terminal . You will see that tens of thousands of people trade in the stock market. Most of them are not professional traders. A tradernet is convenient for beginners: you can watch portfolios of other people , those who have already begun their journey in the stock market. You can monitor what deals are made by the most successful traders, focus on their experience and comprehend the basics of the game in the stock market. Or you can take as a basis a ready-made portfolio of securities compiled by specialists.
If you first open a demo account with a million virtual rubles, then you can learn to trade on the exchange without risk. A novice trader with virtual money buys stocks, gets used to the interface of the trading terminal, learns to analyze the situation on the market. When the novice trader is ready, he opens a real account, invests and earns the first real profit.