Just like in real world you can get a loan from a bank. But you can also invest your money with the bank, and make some money with that. While they use our money to make more money from it.

We should be able to do that here too. Banks are a much safer place to put money into. The bankers can use that money to make their own investments and earn money from it.
While we earn a small % for a period we decided to lock the money in for.

+1 Archive

But from knowing how hard making money with a bank is. We could possibly create NPC banks that will "invest" and generate income for them self. Then these could be our savings account banks?

Sorry to shoot you down mate. This topic has alredy been addressed.

viewtopic.php?f=4&t=1537

The outcome was that we will not be getting interest, instead you get the piece of mind that your gold is safe.

-1

bankers can just give people interest manually if they really want to do that. I know Rothschild did at one point

In all honesty, since I am now a banker I can see the other side of it. Loans will never even pay for the bank. Let alone pay for interest on peoples accounts.

To generate enough interest to truly make higher level bank development worthwhile requires an enormous through-put of successful loans : that is loans paid off in full : the math is simple enough : if you charge 10% interest, then one failed loan in 10 will nullify any profit : okay, nation loan insurance ( if available) may cover some of it, but that is not a given : there is some provision for covering newbie loans, but that is not a given either on all loans : realistically, a failure rate of more than 1 in 10 means no funds being generated to develop the loan book, that is the funds ready to be loaned, never mind the bank itself.

While that is the case, then any notion of interest on deposits is a non-starter.

The hide-out notes rightly warn you that building a bank will require an enormous investment of funds and time : fact is, you wont see much of it coming back to you for many years, if ever.

The major reason to develop a bank is not to loan money, that wont pay for it : its the convenience of a safe store for your own funds, the ability to move those funds as required at low turn cost and if you can make some interest on loans, thats really just a small bonus.

Probably the only way a bank could feasibly fund interest payments would be on a fixed term bond : a sum deposited and not repayable until the term expires : those funds could then be used by the bank to make more loans confident that it wont be asked to pay it back while the loans are still out-standing. So, an example might be that I lodge 25million with you in such a bond for one year with a guarantee you will repay me 27.5mil when it matures. you then lend out that 25mil and hope, over the year, to make more than 2.5mil back in interest payments.

If we follow real life then we should not implement it. In my country, interest on saving accounts have dropped to 0.5% or less. I hear that some are in the verge of 0 interest and/or negative interest. I think german national bonds have negative interest.

Banks pay interest when they need to attract capital that they can then use to lend out at higher interest rates, ignoring the interplay of government intervention with such things as reserve systems. When the money supply contracts, then interest rates usually go up as banks begin to compete for smaller pools of available savings from depositors.

Since Avonmore has no issue with money supply, it is doubtful that interest rates will every need to be paid on savings deposits at our banks by other players. Too many ways to make plenty of gold coin on a daily basis for the banker.