rootless2:

Why in the world would anyone go into such a business?

Well, for one I am not certain that I did get more in interest last year then they nicked in fees, but anyhow there are a couple of possible reasons:

1. That the government demands it for access to the lucrative borrow from central bank and lend to customers business.

2. That borrowing from customers is cheaper then borrowing form the central bank when it comes to liquidity demands of the government.

3. That it brings customers in.

On the third, I do have an account with the bank of my local supermarket chain that did pay interest and have no fees. But then again once I have put money in that bank I am probably more likely to shop at their stores anyway. And with a banking license they can fund their own loans from their own bank, even though they do not appear to lend to anyone else.

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