Why Do Some Accounts, Like Savings Accounts At Your Local Bank, Earn Interest?

Why Do Some Accounts, Like Savings Accounts At Your Local Bank, Earn Interest?

The correct answer is "because the bank pays you to use your money"

Savings accounts, like the ones at your local bank, earn interest because the bank uses the deposited funds to make loans and investments. In return for allowing the bank to use your money for these purposes, they pay you interest as a form of compensation. This interest is a percentage of the balance in your account and is typically paid out periodically, such as monthly or annually. It's a way for the bank to incentivize individuals to save and keep their money in the bank, while also generating revenue for the bank through the interest earned on loans and investments.