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Using Banks and Bank Accounts/Fractional Reserve Lending


Hi George

Is it true that if I deposit my paycheck into a bank ( like Bank of America, Chase, TD Bank, and any other big bank)every week. The whole year goes by and I don't take much out. For example out of $700 I take $200 and leave the rest in there. When I do my taxes at the end of the year. The bank I put the money into, Fractional reserve lended that $$ to other people in businesses for a profit(interest). So they led it out that interest and banks get pay, and they have to claim it at the end of the year to pay their taxes, but this money come from my deposit. So there for I could claim it. Are you aware of this or this is false?

Hi Juan,

You are right banks do lend out deposits to consumers and small business that they have have on deposits that are coming from people like you (that's how banks get paid, through margin.)

I am assuming institutions do claim any interest earned from the loan as well as deduct any interest that they pay on your money, so the margin of tax there is guessing 1-2%.  Very tough to answer your full question because it might be suitable for a corporate accountant who specializes in this sort of complicated accounting and balance sheets.

You can only claim interest you've earned through the bank on your account, if it totals more than 10$ per year, other than that you have nothing to do with the bank end business of the banks internal lending profits, margins or gains.

Using Banks and Bank Accounts

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Anything pertaining to Commercial or Retail Banking. Including, Interest rates, Lending, as well as Prime Rate questions. Also can help with online banking questions including all regulations.


Retail and Commercial banking since 2002. Currently employed as an Assistant Vice President at a Commercial Bank.

Chamber Of Commerce, National Notary Association

Extensive credit knowledge.

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