Why Deposit, Borrow, & Invest

Why Deposit, Borrow, & Invest.

The importance of taking greater actions to support a minority-owned bank comes from the ways in which banks make money. The two central operations of small banks such as those who cater to minorities are taking in deposits and giving out loans. Banks use the money that they receive from deposits to make loans. Checking accounts, savings accounts, and CDs are all forms of deposit accounts that banks use to make loans which banks make their profits from via interest payments. Banks often use the funds of depositors and pay a small fee to the depositors in the form of their interest payments.

The emergence of minority-owned banking is not a new phenomenon by any stretch. There have been minority-owned banks since 1865 in the United States. Places such as Tulsa, Oklahoma, and Durham, North Carolina created minority -owned banks, with Durham’s minority-led financial sector even becoming known as Black Wall Street.

Consumers in the community think that they can support minority-owned institutions simply by opening a checking account and depositing their money. However, this is simply not enough. For the vast majority of minority-owned banks, customers will need to do more to help support their overall mission. Our minority-owned banks need you to apply for a loan and secure a loan. Loans keep the wheels moving not only for the banks, but for the communities that they serve as well.

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