Interest on Bank Accounts

[Argo]

Ok. Just asking. Thanks.

[Psychodad]

RL banks loan out money legally at ten times the deposits amount for the bank. They pay a portion of interest earned to the high end depositors for as long as funds are on deposit. Loans have some protection as failure to pay or default can lead to liens or judgements placed on the delinquent borrower. So a bank that has a thousand gc deposited could loan out as much as ten thousand. Charging interest for each of the ten thousand gc on loan, meanwhile the depositor gets a fraction of the interest on what they have deposited only.

POG banking is a place to store money...

[Argo]

What PD said - I asked bc I have some maxed accounts which just sit there. I wondered if maybe interest could be paid on maxed accts if they stay maxed over xx amount of time..or something. Just sitting there seems pointless. I could spend it I know. I could convert it. But its nice to have some ready cash if you need it and if it can earn a little while it sits...all the better.

[Schwarzbart]

What Psychodad described was the Reserve requirement, which was indeed 10% in the US, but higher or lower in other Countrys. The Reserve requirement has been abolished last year and has been replaced by what the Feds call ample-reserves system.
But even before that suretys (Yes suretys, because if you "loan" more money than you got, it isn't a loan at all) were much higher than that, because banks could sell off those obligations, which could in turn be bought with suretys by the bank. Making the amount essentially limitless.
I bet you wish your bank in Avonmora was able to do that.

[Captain of the Seas]

I feel like this could be an interesting thing to have, and one I would like to see, but I think that if this were to happen, the interest should only be payed at the end of every month to prevent people from getting too much money too fast. Other than that, as long as the interest rate is low, and there is a set time of how long the money has to sit, it sounds like a nice idea.

[Most Lee Harmless]

Again?

As an experiment I made 50 loans. 23 defaulted. Not vast amounts but enough that any profit I made on the repaid loans was still not enough to cover it. Result : I don't make loans anymore.

Now, if I have to pay folk so that they can store their coin in the bank I had to spend billions developing... guess what will happen?

Yep. Closed doors. Go build your own bank if you want your coin safe from pirates. I ain't paying you to do it for you.

Fix the first problem : unsecured loans and unrecoverable debt : then come back and talk about interest on coin I have already paid to guard. Until then : dream on.

[Argo]

Again?

As an experiment I made 50 loans. 23 defaulted. Not vast amounts but enough that any profit I made on the repaid loans was still not enough to cover it. Result : I don't make loans anymore.

Now, if I have to pay folk so that they can store their coin in the bank I had to spend billions developing... guess what will happen?

Yep. Closed doors. Go build your own bank if you want your coin safe from pirates. I ain't paying you to do it for you.

Fix the first problem : unsecured loans and unrecoverable debt : then come back and talk about interest on coin I have already paid to guard. Until then : dream on.

That is a really fair point, Danik.... I had no idea of that perspective