Banks as custodians
Explore why banks take deposits (safe keeping) and make loans (income).
In this lesson
Banks as custodians is part of What Is a Bank?. This preview shows how banking-basics connects to everyday family decisions such as earning, saving, spending choices, goals, approvals, or parent-guided money conversations inside Progress Penguin.
Think about this money choice
Imagine this situation: You deposit 20000 in local currency at GTBank. The bank lends 15000 in local currency of it to a business.
How it works
Banks take deposits (safe keeping) and make loans (income). The spread between deposit interest paid and loan interest earned is the bank's revenue model.
Try a real-life example
Real-life money moment: Bank takes 1000000 in local currency in deposits, pays 4% to depositors. Lends 700000 in local currency at 15%.
Activity preview
Match the money ideas
Use what you learned to complete this short challenge.
Quiz preview
Banks make money mainly by:
You deposit 20000 in local currency at GTBank. The bank lends 15000 in local currency of it to a business. Is your 20000 in local currency still safe?