Which of the following is NOT a way that banks make money?

• A. Charging fees for account services
• B. Charging interest on loans
• C. Collecting deposits from customers
• D. Investing in financial securities

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the primary ways banks generate revenue. Banks typically earn money by charging fees for account services, charging interest on loans, and investing in financial securities.
2. Step 2: Analyze the option 'Charging fees for account services.' This is a common revenue source for banks, as they charge fees for maintaining accounts, overdrafts, and other services.
3. Step 3: Analyze the option 'Charging interest on loans.' Banks lend money to customers and charge interest, which is a major source of income.
4. Step 4: Analyze the option 'Investing in financial securities.' Banks invest in various financial instruments to earn returns, which contributes to their profits.
5. Step 5: Analyze the option 'Collecting deposits from customers.' Deposits themselves are not a way banks make money; rather, deposits provide the funds that banks use to lend or invest. Therefore, collecting deposits is not a direct revenue source.