Why would a bank give you only 3% interest on money in your savings account while charging you 5% interest for a loan?

The focus of banks is making money, so they increase interest rates on loans to make more money.
Since interest on a deposit is compounded, banks are actually paying more in interest to the depositors.
Government regulations force banks to charge higher interest rates on loans than they do on savings.
Banks are businesses and need to make money or cover overhead expenses.

Question

Why would a bank give you only 3% interest on money in your savings account while charging you 5% interest for a loan?

The focus of banks is making money, so they increase interest rates on loans to make more money.
Since interest on a deposit is compounded, banks are actually paying more in interest to the depositors.
Government regulations force banks to charge higher interest rates on loans than they do on savings.
Banks are businesses and need to make money or cover overhead expenses.

tkhunny · Answer

1) We are to believe that loans and savings accounts are somehow linked?  Where is that established?

2) Consider the merits of each.
Focus - Mean spirited.
Compounded - Makes no sense.
Government - Inflammatory and silly.
Overhead - Really, that's all they get to cover?  No profits at all?