This is what I figured out.... But not sure if missing something (numbers only for illustration): How it used to be, at least I thought so) : bank took depositor money at 4% and lent it for 7%. 3% was for the costs commsions and profit. So in a year they made 300M. Next steage: there was reserve ratio say 10%. Meaning Bank had to have 10b deposits to be able to lend 100B. Extra 90B money came from selling bonds reserve bank. They paid depositors 4%, bonds say 5% and reserve bank 4%. They make 3% on 100B which is 3B. Next and current : reserve ratio 10%. They introduced matching and credit cards. If person A borrows 1M and pays person B for property for example and person B is with the same bank, and uses credit card then money (paper) never has to be delivered, this 1M does not have to be borrowed by the bank. Bank created money by itself and pockets full 7% that charges borrower. If for example banks connect and this matching goes across banks there is no need for actually bank borrowing money. Probably also hide from official eyes. So they make 3% on 10B, lent another 500B and pocket 7% on that which is 35B, so in total they make 35.3b profits per year witn 10B deposits. So, does not really matter what the deposit rate is. Even if 15% who cares. Bulk comes from that virtual money. Every bp in interest makes large differece to profit. One would think banks would be motivated to push interest rates up and faaarrrrrr. comments ??