What is the largest source of income for banks?


Quick Answer

The largest source of income for banks are the deposits they receive from account holders. These deposits from the general public are proportioned into securities, such as checking, savings and money market accounts. Banks are lending institutions, and their revenue derives from the interest they make from lending money.

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Full Answer

When the bulk of a bank's income does not derive from customer deposits, this usually means the bank cannot attract enough customers. Alternatively, the bank can derive income from wholesale sources of funds, shareholder equity or debt issuance. Consumer lending provides the greatest source of revenue; when a bank is unable to rely on this, it may not be competitive with other banks.

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