When you open a bank account, you create a safe place to store your money. But in reality, you’re starting a lending service that the bank controls. Every time you deposit money, you’re expanding this service. The bank doesn’t just keep your cash in a vault; it uses your deposits to provide loans to other people, fueling their business ventures and earning interest.
The bank pays you a slight interest in exchange for using your money. But if you’ve ever looked closely at your bank statement, you’ll notice this amount is minimal—almost negligible compared to the interest rates they charge borrowers, huge investors. It’s a classic case of the rich getting richer, and your hard-earned money plays a significant role.
The more you deposit, the more resources the bank has to make loans and, in turn, earn substantial interest. But here’s the catch: the bank may not be so accommodating when you need to borrow money. If they grant you a loan, it’s likely at a high interest rate, meaning you’re essentially borrowing back your money and paying extra for it.
The truth is that your money is helping finance the bank, enabling them to have more funds to loan to others. Meanwhile, your investment in the bank earns almost nothing in return. This raises an important question: Why should your money be used to generate significant profits for the bank while you receive only a fraction of that wealth?
A Call for Action: Demand Transparency and Fair Returns
It’s time to rethink this dynamic. Imagine a scenario where banks must disclose how much of your funds they lend to businesses and in what industries. What if legislation compelled banks to share dividends with customers based on the profits generated from the businesses your money helps finance?
For example, let’s say a bank uses $10,000 of your deposits to fund a new tech startup. This startup becomes successful, and the bank earns significant interest on the loan. Under this new system, you would receive a share of the profits—not just the paltry interest rates they offer.
Mobilizing and making your voice heard is crucial to bring this vision to life. Reach out to your representatives and urge them to pass legislation that enforces transparency in how banks use your money. Push for laws that ensure customers receive a fair share of the profits generated from the businesses financed by their deposits.
Your money should work as hard for you as it does for the bank. Let’s demand a system where your investments earn what they truly deserve.
Bobb Rousseau, PhD
Business Coach