If Zero Rates Are Gone for Good, What Is a Checking Account Worth to a Bank?
Banks use the cash they collect from customers to make loans, and they earn the spread.
Overview
A checking account makes life much easier by allowing you to conduct financial transactions, such as paying bills. A bank account, meanwhile, is a place to safely store money until you need to use it. These are the core services that a bank like Bank of America (NYSE: BAC) provides its customers.
But what does Bank of America get out of these accounts? The answer is a lot, and a comparison to a mortgage real estate investment trust (REIT) like AGNC Investment (NASDAQ: AGNC) will help explain it.
Image source: Getty Images.
Details
Source
Originally published at www.fool.com.
Related Articles
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Data may be delayed up to 15 minutes. Past performance is not indicative of future results. Consult a licensed financial advisor before making investment decisions.