How Does BANKS DON'T LEND MONEY Work?

Banks don’t lend money because they already have it, like having a piggy bank full of coins and not needing to borrow from anyone else.

Imagine you’re at a toy store, and you want a new bike. But instead of asking your parents for more allowance, you just take out the coins from your piggy bank and buy the bike right then. That’s what banks do, they already have your money saved up, so they don’t need to ask anyone else for it.

Banks get money from people who save their cash with them. You put your coins in a piggy bank, and the bank puts your coins in a big jar, only much bigger. When someone wants a loan, like buying a house or starting a lemonade stand, the bank just takes out some of those coins from its big jar and gives it to that person.

It’s like having a huge piggy bank with all your friends’ coins too. You don’t need to ask anyone else for money, you already have enough!

So next time you see a bank, think of it as a super-sized piggy bank full of everyone’s saved coins, ready to give out money whenever someone needs it. Banks don’t lend money because they already have it, like having a piggy bank full of coins and not needing to borrow from anyone else.

Imagine you’re at a toy store, and you want a new bike. But instead of asking your parents for more allowance, you just take out the coins from your piggy bank and buy the bike right then. That’s what banks do, they already have your money saved up, so they don’t need to ask anyone else for it.