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I know some people on Wall Street because I worked there so long. Below is my strong sense and best educated guess. (I’ll try to verify over the next few weeks to get a better sample. The sample will be biased because they’re my friends who are still on Wall Street and willing to talk.)People on Wall Street mostly don’t think about Glass-Steagall or restoring it.The ones that do think about it don’t think about it much. But regardless of how much they think about it, they mostly don’t like it. This is partly because, like most people, they don’t like change in their lives (restoring Glass-Steagall is change that can affect them) and partly because they suspect restoring Glass-Steagall will lead to increased regulation/oversight and put their jobs and bonuses at risk.I’m ex-Wall Street and have a different view:I think restoring Glass-Steagall is a good idea but not a great one. Restoring Glass-Steagall helps reduce conflicts of interest in some cases. But not most cases. It helps reduce systemic risk. But not by much.A much better idea is to have comprehensive, thoughtful reform to:reduce systemic risk and conflicts of interest andreduce red tape and bureaucracy.Without offering #2, you are not going to pass #1. So, yes, there will be change for regulators. Some will lose power or be out of jobs or not be able to replace headcount that leaves. Finance-related agencies should be combined (the CFTC, SEC, Federal Reserve, OCC, etc. can just be one agency with subdivisions but they will have to work together instead of engaging in political turf battles). But I don’t see why Wall Street would let Congress just do #1 without a massive fight. Wall Street is a lot of things - good and bad - and they are really good at lobbying. I don’t know why we have so much regulation and red tape anyway, so offering #2 should be almost a no-brainer (if I’m missing something, please let me know in the comments below, your own answer or Quora DM.)We need to thoughtfully and comprehensively reduce or eliminate in some cases the massive red tape, outdated law, rules and regulations. For example, it makes no sense to me that a wealthy individual worth $5 million or more in net assets can’t engage an investment manager that shares in both the profits and the losses of the investment manager’s investment. There’s no reason wealthy individuals can’t hire investment managers whose financial interest are much more aligned with theirs. I’d argue this should be true for all investors but let’s experiment first with those who can afford to lose money - the wealthiest investors - first.Back to reducing systemic risk and conflicts. We should find ways to regulate shadow banks and other big entities engaged in financial services.This would include fintech startups that get big enough and might be engaging in activity that can pose risks to the system, like operating as a de facto hedge fund, prop trading desk, private equity shop, commercial bank or investment bank.Risky behavior that can impact the system should be managed, regulated and controlled. Regardless of the source of the risk (bank or non-bank).For example, Glass Steagall could have helped prevent big collateralized debt obligation (CDO)-related losses at Citi because Citi would not be able to engage in investment banking activities (generally defined) like CDO structuring, sales and trading.This Bloomberg article argues otherwise, but the article is wrong: Citi was a big player in CDOs when the 2008 financial crisis occurred. So were other banks like Credit Suisse, UBS, Deutsche Bank, etc. (because these are foreign banks, you’d regulate the US branches and subsidiaries through which they acted).Revenge Against Big Banks Will FailOnce dodgy mortgages were sold to investment banks, they were packaged into mortgage-backed securities for sale to investors seeking the higher returns that supposedly safe mortgage bonds yielded over other instruments. Here the main actors were Lehman Brothers, Bear Stearns, Goldman Sachs, Merrill Lynch and Morgan Stanley -- all free-standing investment banks. Some had specialty commercial banking units, but those weren't the source of their problems. Again, Glass-Steagall played no role.because banks that engage in both commercial banking and investment banking pose unnecessary risk to the system and have inherent conflicts of interest that are too difficult to overcome.During, after and in the run-up to the 2008 global financial crisis and near-systemic meltdown, my ex-coworkers, friends and I saw first hand the dangers that arose when multiple banks engaged in different risky activities with enormous leverage.When Merrill Lynch was independent, we would lose out on loan deals all the time to commercial banks. That would be fine, except the commercial banks used lending (which they had huge balance sheet for and we did not) to get a foothold for the much more profitable capital markets and investment banking deals we also competed with them on. Yes, these commercial banks did both commercial banking and investment banking. So did we (a lot of the investment banks had a commercial bank domiciled in Utah.) And, in some ways, this lead to a race to the bottom in part because the compensation structure wasn’t fixed (and is still broken).Looking back, Glass-Steagall was enacted to break apart financial oligopolies like J.P. Morgan into a commercial banking entity (named J.P. Morgan, $2.4 trillion in assets) and an investment banking entity (Morgan Stanley, $650 billion in assets). The reason? The Great Depression, caused in part by the banking oligopolies.Fast forward to 2008. Lehman imploded, triggering a global financial crisis and near-meltdown. We’re all still feeling the effects nearly 8 years later. It doesn’t always seem like it these days, because we have massaged numbers like low unemployment (which ignores the high number of people who gave up), new jobs (mostly low-paying) and stock and bond market rallies (propped by abnormally low rates and money printing).Anyway, shortly after Lehman imploded I’m in the offices meeting one on one with one of the most respected (by insiders) Wall Street executives. Here’s what transpired (I changed the dialogue a bit for dramatic effect and because I don’t recall verbatim what happened.(Note: I’d get these meetings in no small part because my classmate and acquaintance friend, Barack Obama, was the Democratic nominee for President, and I was occasionally whispering in the ear of one of his top fundraisers/trusted friends, etc. People who liked me and/or thought I was useful would introduce me to folks who might have something to say. In addition, I had my own set of contacts I built up over the years.)“How do we fix this?” I asked.“We need to break up the banks” was the reply.“What?! Explain.” I said.“[Big] banks do a few things. And there’s huge conflicts of interest.One, banks get deposits and make loans.Two, banks engage in investment banking activities (underwriting, advisory).Three, banks manage other people’s money (asset management/wealth management).And four, banks run a hedge fund (proprietary trading, private equity, hedge fund), managing the firm’s own money. [One of my top trader friends used to joke about Goldman Sachs being a terrific hedge fund. We both worked at Morgan Stanley then, Goldman’s biggest rival. Goldman was more profitable but we thought they made their money taking on more risk by being more aggressive in activities like proprietary trading, private equity, etc.]You have to break all this stuff out. Each activity should be in its own entity.”“But we have [the unfortunately named] Chinese walls for that.” I replied.”Yeah, those don’t work when push comes to shove. I looked at them. You have to break the banks up.”Wow. I did not see that coming.*I own stock in commercial bank Bank of America (which in turn owns Merrill Lynch) and in commercial bank holding company Morgan Stanley (which really operates as an investment bank).

As always, my answers are US-specific. I’ve studied and taught at a number of different higher education institutions, but that still won’t represent the full breadth of what exists, even in the US. We have about 3,000 institutions that grant a bachelor’s degree or higher. In the US, we use the word college to refer to what most countries describe as university, so a typical “college student” is someone studying for a bachelor’s degree.For a variety of reasons, the bachelor’s degree, typically earned in 4–6 years of full-time study, is the standard, entry-level degree. The typical US college student is a recent high school graduate, age 18 or 19, who continues directly to college. The number of nontraditional students is growing, though, and I’ve seen people finish a bachelor’s degree in their 70s. This period of study is called undergraduate or undergrad. Generally, the four years are called freshman, sophomore, junior, and senior year, and the students in them are called freshmen, sophomores, juniors, and seniors. When students go beyond four years, they are sometimes called super-seniors.Most schools use some kind of system to identify courses as being geared toward a particular year. Often this system has freshman-level courses starting at 100, sophomore-level courses at 200, junior at 300, and senior at 400. Courses for juniors and seniors are sometimes called “upper division”. However, these are just useful rules of thumb; in my program, computer science, essentially all of our coursework is in the 200 and 300 ranges. Sometimes the range below 100 will include remedial courses, covering content that most students will have mastered before starting college.The bachelor’s degree is usually a necessary credential to enter the professional workforce. It’s not always sufficient, and some professions require additional education and even additional degrees. A small number of professions are credentialed outside of academia, like medical doctors, lawyers, and pharmacists, and their post-bachelor’s degrees are typically called professional degrees. Outside of that small group, post-bachelor’s degrees are earned in graduate (or grad) school and called graduate (or grad) degrees. Sometimes degree defy easy categorization; the Master of Business Administration does not have any credentialing, but is typically considered a professional degree, but many Master of Science degrees are for professionals, but considered graduate degrees.Most undergrads in the US do not enter school definitely knowing their major field of study (aka, their college major); some will have selected a major, but for most, change is common and fairly easy, especially in the first two years. They spend their freshman year learning in different disciplines across the academic spectrum of the school. The hope is to both find a major and to complete some of the general education requirements for their degree. General education requirements, also called gen eds, are focused on breadth, and typically require students to take a mix of natural science, social science, and humanities coursework. It will account for about 1/3 of the credits required to graduate (finish their degree).At some point, a student formally chooses (or “declares”) their major. Sometimes the student will need to complete certain courses before they are allowed to declare a major. Some majors are competitive for admission, either at the time of admission to the school or after one or two years of coursework. Once a student declares a major, they often refer to themselves by that major; they might say “I’m an English major” (or after graduation, “I majored in English”), and even label the degree by the major (“I have a degree in English”), even though English coursework only accounted for 1/3 of the degree.In the sciences, humanities, and social sciences, a major will typically account for an additional 1/3 of the student’s coursework for the degree. Most majors have two or three parts: a required core, a set of open electives in the upper division, and possibly a capstone or senior seminar or thesis. The core will allow for little variance; it might be a required set or sequence of courses (a sequence must be taken in a specific order), or it might allow for limited choice (e.g., “here is a list of three courses; you must take two”). The electives will normally need to satisfy certain breadth requirements; for example, a history major will need to take courses using different research methods, focusing on different types of history (social, cultural, intellectual, political, etc.), and/or focusing on different regions and timeframes. A capstone is a semester- or year-long course or program that leads to some kind of paper or research project (or both) that integrates much of what the student has learned and encourages the student to be creative.Increasingly, schools are grouping together courses from multiple fields to create interdisciplinary majors, or majors that cross into multiple fields. My favorite from a naming standpoint is “transglobal studies”. I’m very wary of these, but some are great programs; a colleague majored in “applied mathematics, engineering, and physics”.If you add the gen ed requirements of approximately 1/3 of the degree to the 1/3 that many majors require, you are left with 1/3. How does that last 1/3 get filled?In some fields outside of the natural sciences, social sciences, and humanities, there are more major requirements; engineering often has a large number. In all fields, a major can require coursework in another field, and that doesn’t count toward the 1/3 for the major. For example, a major in comparative literature will require coursework in a foreign language, and many STEM (science, technology, engineering, and mathematics) majors require significant coursework in mathematics (or, in the case of mathematics, in mathematically-challenging sciences, like chemistry or physics).Some schools require students to complete a second type of focus called a minor field of study, or a minor; most schools offer minors even if they don’t require them. Minors can also be called concentrations (or other things). Most minors are slimmed-down versions of a major, and require most of the core and few upper-division electives. Sometimes interdisciplinary minors are cobbled together out of multiple programs; we offer an information systems minor that includes coursework from computer science and business. Since minors are, well, minor when compared to majors, I have far less concerns about interdisciplinary minors.Some students do double-major; that is, they complete two full majors. This is fine, but it shouldn’t typically be your focus, and it shouldn’t extend your time in undergrad; if it would take more than an extra semester, it almost certainly isn’t worth the effort. I’ve seen student try to complete three majors and two minors, and there’s just no way or sense to doing that. Sometimes there are particularly useful major/minor combinations, especially if you want to go to grad school, but even then they aren’t usually necessary.The goal of most college/undergrad programs and majors is not to specialize. The goal is to sample the diversity of the intellectual world and to build skills in one specific area. Most of your work is in breadth, not depth. Specialization happens in grad school. Computer science (CS), my field, shares a lot of concepts and methods with mathematics, and if I have a student who wants to minor in mathematics, I don’t object, but I encourage students to choose minors (we do require one) that will give them strength in a different area. I have CS majors who are minoring in history, theology, and creative writing.Once you complete all graduation requirements: major requirements, general education requirements, any additional requirements, and (normally) a minimum number of credits (sometimes called hours or units), you can graduate and are granted a degree. If you fail to complete even one requirement, you will normally not graduate and cannot claim to have that degree. We require students to complete two credits of physical education, and if they don’t do that, they don’t graduate, regardless of any other achievements. If a student cannot complete a certain requirement for a given reason, they might be granted an exception, but typically the school will find a workaround. For example, a student with serious physical limitations might not be able to complete normal physical education coursework, but they might be able to learn about physical fitness for someone with their physical limitations.As for degrees, some people mistakenly think that the specific bachelor’s degree matters, when it usually does not. There are no standard rules for what comprises a bachelor of arts (BA) or bachelor of science (BS). Here, the term “arts” is a reference to the classical sense of ars, the Latin term for a comprehension, not art in the sense of painting. At some schools, different disciplines are attached to one or the other (it’s not always as expected; very commonly, a master’s degree in mathematics is an MA). At some schools, you can earn either one, and other schools offer only one (typically the BA). I’m at a liberal arts college; this defines our educational philosophy, not our courses of study, and we only grant the BA.College invariably has costs associated with it. Even students who receive full scholarships might have to pay for room and board (food and dormitory or apartment) and expenses, including books. Some students receive a “full ride”, which typically includes room and board, but they still have expenses. Books can be very expensive (we don’t set the prices; blame the publishers). Even if everything was paid for, the student still is normally mostly out of the workforce, although most students do work part time.Many students receive financial aid, which is typically a package of grants, loans, and possibly work-study money, to pay for school. On top of this, students and their parents/guardians (unless the student meets certain independence rules, like being 25 or being married) are expected to contribute. The amount of each type of aid is determined by each school, but they use a common form that has a formula to determine a standard Expected Family Contribution (EFC). That form, FAFSA - Free Application for Federal Student Aid, is provided by the federal government.Grants are free money; you never have to pay them back. The money comes from one of two sources: taxpayers and donations. Some grants come from the federal government; this is typically the Pell grant, given to students from relatively low-income families. Some can come from individual states, some from private organizations, and some from the school itself.About 60% of students graduate with educational loans. In the US, the federal government has rules about educational loans that mean that these loans typically have very low interest rates, often as low as a home mortgage, despite the fact that there’s no collateral to secure the loan; that is, if you stop paying your student loans, there’s nothing the loan company can repossess from you and sell to cover their losses. As a result, students cannot normally get out of student loans, even if they declare bankruptcy. Most unsecured loans are small, short, and have high interest rates.In addition to protections for the lenders and low rates for the students, the federal government subsidizes the interest on some loans while the student is in school. These loans, subsidized Stafford loans, start accruing interest from the moment you get the money, but as long as you are in school, and for the first six months after leaving school (quitting or graduating), the federal government pays this interest; you are not charged this interest. You only have to start paying the interest after leaving school and the six-month grace period.Of those students who have loans, the average loan amount for grads in 2016 was about $35,000. Most students try to discharge their loans within ten years, but some take as long as twenty. Payments range from modest to insane, but insane tends to come only with very high debt amounts. The financial aid office at the school will help you understand what your likely total debt will be at graduation, although if you take longer to graduate, that amount will go up.I know $35,000 seems like a lot of money. It is a lot of money. However, the cost of your education is a lot higher. The cost of your education, what it costs the school to teach you, house you, feed you, etc., is invariably much lower than the price, what you pay combined with your loans. At a private school, the typical cost of an education is anything from $40,000-$75,000 a year. At a public school, the cost is range is more like $9,000-$25,000, but that’s not counting what the state is contributing. That means that over four years, anywhere from $36,000 (not including state subsidies) to $300,000 is spent on your education.After you graduate, you have to get a job. College is not about job training or getting a job, but it’s important to remember that you must get a job after graduation. There are ways to build skills that will make you employable; however, “employable” is not the same as “employed”. Strong writing skills, for example, will make you employable, but writing-focused jobs are relatively hard to get because there are so few jobs relative to qualified candidates; on the other hand, mathematical or computing skills are in much higher demand relative to the number of people who have those skills, so you are more likely to actually be employed (sooner) if you have those skills.The unemployment rates for college graduates are very, very low, and income rates are much higher than for those who don’t have college degrees:(Souce: Unemployment rates and earnings by educational attainment)Note that these numbers are for people over 25. From what I’ve seen, someone with a college degree in STEM (science, technology, engineering, and mathematics) will typically have a career-oriented professional job within a year of graduating college; it can take those with degrees in other areas as long as 3–4 years to get their first career-oriented professional job, though. People often work “temp” office jobs to begin with, and some people will find their profession and first professional employer through this work. There is a lot of anxiety about employment for recent college grads, and there are people who will stoke those fears, but long-term, you can see what the statistics are above.College is not the right choice for all people. There are some people who hate school and would be miserable (and are likely to fail). There are some who don’t want to work in office-type professions; if you are really good with your hands, a building trade (e.g., plumbing, carpentry) can be a better fit with as much (or more or less; it depends) long-term earning potential. There must be some intellectual level below which a college degree is not feasible, but I’ve met very few students who could not finish college. The vast majority (90%+) of students I’ve seen leave without degrees have done so because they were unhappy or unwilling to do the work or both.Good luck!

This question is a bit of a brain puzzler, and there does not seem to be a very clear answer to this Question Resources and Information. a quick glance, I would say investments would pay more money to the bank than fees would, however, let's examine the facts and that way, one would come to their own conclusion, as it is also very obvious that fees bringing tremendous amounts of money to the bank. So we will start by defining like the bank, fees, and investments, and glean as much information as we could as we navigate the question and answer. Let's do this:BankDescriptionA bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries.How Banks WorkBY LEE ANN OBRINGERAccording to Britannica.com, a bank is:an institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans and derive a profit from the difference in the interest rates paid and charged, respectively.Banks are critical to our economy. The primary function of banks is to put their account holders' money to use by lending it out to others who can then use it to buy homes, businesses, send kids to college...When you deposit your money in the bank, your money goes into a big pool of money along with everyone else's, and your account is credited with the amount of your deposit. When you write checks or make withdrawals, that amount is deducted from your account balance. The interest you earn on your balance is also added to your account.Banks create money in the economy by making loans. The amount of money that banks can lend is directly affected by the reserve requirement set by the Federal Reserve. The reserve requirement is currently 3 percent to 10 percent of a bank's total deposits. This amount can be held either in cash on hand or in the bank's reserve account with the Fed. To see how this affects the economy, think about it like this. When a bank gets a deposit of $100, assuming a reserve requirement of 10 percent, the bank can then lend out $90. That $90 goes back into the economy, purchasing goods or services, and usually ends up deposited in another bank. That bank can then lend out $81 of that $90 deposit, and that $81 goes into the economy to purchase goods or services and ultimately is deposited into another bank that proceeds to lend out a percentage of it.In this way, money grows and flows throughout the community in a much greater amount than physically exists. That $100 makes a much larger ripple in the economy than you may realize!What do banks charge fees for?To make a profit and pay operating expenses, banks typically charge for the services they provide. When a bank lends you money, it charges interest on the loan. When you open a deposit account (checking or savings) there are fees for that as well. Even fee-free checking and savings accounts have some fees.Bank FeesREVIEWED BY WILL KENTONDEFINITION of Bank FeesBank fees are nominal fees for a variety of account set-up and maintenance, and minor transactional services for retail and business customers. Fees can be one-time, ongoing or related to penalties.BREAKING DOWN Bank FeesBanks fees seemingly lurk everywhere. There is a comprehensive disclosure of the menu of fees on banks' websites and in pamphlets with fine print. Customers must carefully read the disclosures to avoid surprises. Certain fees apply to all customers across the board, while others may be waived under certain conditions. While competition is a natural regulator of where a bank may apply fees and how much it thinks it can get away with, government authorities such as the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) stand by to field complaints and concerns from the public about fee-charging practices by banks.Sample List of Bank FeesWells Fargo charges retail customers fees for ATM transactions (with some exceptions), cashier's checks, money orders, overdrafts, bounced checks, overdraft protection, stop payment requests, wire transfers, safety deposit boxes, minimum account balance requirements, and others. Fees for merchant, payroll, and bill payment services apply for small businesses, while treasury management and corporate trust services offered by a bank to larger businesses carry fees. Also, fees for establishing and maintaining loans or lines of credit, the bread-and-butter of all banks, apply to all.Importance of Bank Fees to ProfitabilityThe primary source of revenue for a bank is net interest income, but a material portion of total revenue comes from bank fees. In 2017, fee income (booked under "noninterest income") for Wells Fargo accounted for approximately 35% of aggregate revenue. An individual fee may be nominal but they add up nicely for a bank. When the net interest margin for a bank is squeezed in a low-interest rate environment, bank fees provide a measure of stability to bank earnings.Investments:According to Wikipedia, investments are:To invest is to allocate money in the expectation of some benefit in the future.In finance, the benefit of an investment is called a return. The return may consist of a gain (or loss) realized from the sale of property or an investment, unrealized capital appreciation (or depreciation), or investment income such as dividends, interest, rental income, etc., or a combination of capital gain and income. The return may also include currency gains or losses due to changes in foreign currency exchange rates.Investors generally expect higher returns from riskier investments. When we make a low-risk investment, the return is also generally low.Investors, particularly novices, are often advised to adopt a particular investment strategy and diversify their portfolio. Diversification has the statistical effect of reducing overall risk.An investor may bear a risk of loss of some or all of their capital invested. Investment differs from arbitrage, in which profit is generated without investing capital or bearing risk.Savings bear the (normally remote) risk that the financial provider may default.Foreign currency savings also bear foreign exchange risk: if the currency of a savings account differs from the account holder's home currency, then there is the risk that the exchange rate between the two currencies will move unfavorably, so that the value of the savings account decreases, measured in the account holder's home currency.In contrast with savings, investments tend to carry more risk, in the form of both a wider variety of risk factors and a greater level of uncertaintyBelow Finra describes the types of investments:Types of InvestmentsThink of the various types of investments as tools that can help you achieve your financial goals. Each broad investment type—from bank products to stocks and bonds—has its own general set of features, risk factors and ways in which they can be used by investors.Learn more about the various types of investments below.StocksWhen you buy shares of a company’s stock, you own a piece of that company. Stocks come in a wide variety, and they often are described based on the company’s size, type, performance during market cycles and potential for short- and long-term growth. Learn more about your choices—from penny-stocks to large caps and more.BondsA bond is a loan an investor makes to an organization in exchange for interest payments over a specified term plus repayment of principal at the bond’s maturity date. Learn how corporate, muni, agency, Treasury and other types of bonds work.Investment FundsFunds—such as mutual funds, closed-end funds and exchange-traded funds—pool money from many investors and invest it according to a specific investment strategy. Funds can offer the diversification, professional management and a wide variety of investment strategies and styles. But not all funds are the same. Understand how they work, and research fund fees and expenses.Bank ProductsBanks and credit unions can provide a safe and convenient way to accumulate savings—and some banks offer services that can help you manage your money. Checking and savings accounts offer liquidity and flexibility. Find out more about these and other Bank productsOptionsOptions are contracts that give the purchaser the right, but not the obligation, to buy or sell a security, such as a stock or exchange-traded fund, at a fixed price within a specific period of time. It pays to learn about different types of options, trading strategies and the risks involved.AnnuitiesAn annuity is a contract between you and an insurance company, in which the company promises to make periodic payments, either starting immediately—called an immediate annuity—or at some future time—a deferred annuity. Learn about the different types of annuitiesRetirementNumerous types of investments come into play when saving for retirement and managing income once you retire. For saving, tax-advantaged retirement options such as a 401(k) or an IRA can be a smart choice. Managing retirement income may require moving out of certain investments and into ones that are better suited to a retirement lifestyle.Saving for EducationFunding education begins with savings. Learn smart ways to save, including 529 Education Savings Plans and Education Savings Accounts. We’ll help you navigate your savings options.Alternative and Complex ProductsThese products include notes with principal protection and high-yield bonds that have lower credit ratings and a higher risk of default than traditional investments but offer more attractive rates of return. Learn about their features, risks and potential advantages.Initial Coin Offerings and CryptocurrenciesThese are speculative investments that come with significant uncertainty and many risks. Before you consider an investment in ICOs or cryptocurrencies, learn more.Commodity FuturesCommodity futures contracts are agreements to buy or sell a specific quantity of a commodity at a specified price on a particular date in the future. Commodities include metals, oil, grains, and animal products, as well as financial instruments and currencies. With limited exceptions, trading in futures contracts must be executed on the floor of a commodity exchange.Security FuturesFederal regulations permit trading in futures contracts on single stocks, also known as single stock futures, and certain security indices. Learn more about security futures, how they differ from stock options and the risks they can pose.InsuranceLife insurance products come in various forms, including term life, whole life, and universal life policies. There also are variations on these—variable life insurance and variable universal life—which are considered securities. See how insurance products may fit into an overall financial plan.Ever wonder how banks make their money? They can't be offering to store your money for free? You're right; here's how banks earn money.How do banks make money?Yes, banks make a lot of money banks from charging borrowers interest, but the fees banks change are just as lucrative.Account fees. Some typical financial products that charge fees are checking accounts, investment accounts, and credit cards. These fees are said to be for “maintenances purposes” even though maintaining these accounts costs banks relatively little.ATM fees. There will be times when you can’t find your bank’s ATM and you must settle for another ATM just to get some cash. Well, that’s probably going to cost you $3. Such situations happen all the time and just mean more money for banks.Penalty charges. Banks love to slap on a penalty fee for something a customer’s mishaps. It could a credit card payment that you sent in at 5:05 PM. It could be a check written for an amount that was one penny over what you had in your checking account. Whatever it may be, expect to pay a late fee or a notorious overdraft fee or between $25 and $40. It sucks for customers, but the banks are having a blast.Commissions. Most banks will have investment divisions that often function as full-service brokerages. Of course, their commission fees for making trades are higher than most discount brokers.Application fees. Whenever a prospective borrower applies for a loan (especially a home loan) many banks charge a loan origination or application fee. And, they can take the liberty of including this fee amount into the principal of your loan—which means you’ll pay interest on it too! (So if your loan application fee is $100 and your bankrolls it into a 30-year mortgage at five percent APR, you’ll pay $94.40 in interest just on the $100 fee).Banks are just like other businesses. Their product just happens to be money. Other businesses sell widgets or services; banks sell money -- in the form of loans, certificates of deposit (CDs) and other financial products. They make money on the interest they charge on loans because that interest is higher than the interest they pay on depositors' accounts.The interest rate a bank charges its borrowers depends on both the number of people who want to borrow and the amount of money the bank has available to lend. As we mentioned in the previous section, the amount available to lend also depends upon the reserve requirement the Federal Reserve Board has set. At the same time, it may also be affected by the fund's rate, which is the interest rate that banks charge each other for short-term loans to meet their reserve requirements. Check out How the Fed Works for more on how the Fed influences the economy.Loaning money is also inherently risky. A bank never really knows if it'll get that money back. Therefore, the riskier the loan the higher the interest rate the bank charges. While paying interest may not seem to be a great financial move in some respects, it really is a small price to pay for using someone else's money. Imagine having to save all of the money you needed in order to buy a house. We wouldn't be able to buy houses until we retired!Banks also charge fees for services like checking, ATM access, and overdraft protection. Loans have their own set of fees that go along with them. Another source of income for banks is investments and securities.How investment banks make their money. ... They make most of their money by charging a higher rate of interest to borrowers than they pay to savers. Investment banks, on the other hand, make their money by selling services to customers such as companies, governments and investment funds (fund managers and hedge fundsHow Investment Banks Make Money (JPM, GS)BY SEAN ROSSUpdated Sep 22, 2016Investment banks are designed to finance or facilitate trade and investment on a large scale. But that's a simplistic view of how investment banks make money. There's a lot more to what they really do. When they work properly, these services make markets more liquid, reduce uncertainty and get rid of inefficiencies by smoothing out spreads.Brokerage and Underwriting ServicesLike traditional intermediaries, investment banks connect buyers and sellers in different markets. For this service, they charge a commission on successful trades. The trades range from megadeals to simple stock trades.Investment banks also perform underwriting services for capital raises. For example, a bank might buy stock in an initial public offering (IPO), market the shares to investors and then sell the shares for a profit. This works like an arbitrage opportunity. There is a risk that the bank will be unable to sell the shares for a higher price, so the investment bank might lose money on the trade. To combat this risk, some investment banks charge a flat fee for the underwriting process.Mergers and AcquisitionsInvestment banks charge fees to act as advisors for spinoffs and mergers and acquisitions (M&A). In a spinoff, the target company sells a piece of its operation to improve efficiency or inject cash flow. Acquisitions occur whenever one company buys another company. Mergers take place when two companies combine to form one entity. These are often extremely complicated deals and require a lot of legal and financial help, especially for companies unfamiliar with the process.Creating Collateralized ProductsInvestment banks might take lots of smaller loans, such as mortgages, and then package those into one tradeable security. The concept is somewhat similar to a bond mutual fund, except the instrument is a collection of smaller debt obligations rather than corporate and government bonds. Investment banks have to purchase the loans to package and sell them, so they profit by buying cheap and selling at higher prices on the market.Proprietary TradingIn the proprietary trading process, the investment bank deploys its own capital into the financial markets. Company traders look for arbitrage opportunities or other strong, shorter-term investments. Traders who guess correctly can make a lot of money very quickly. Alternatively, poor traders tend to lose money and risk losing their jobs. Proprietary trading has been much less prevalent since the financial crisis of 2008 and 2009.Dark PoolsSuppose an institutional investor wants to sell millions of shares, a value that's large enough to impact markets right away. However, the market might see a big order come through. This leaves an opportunity for an aggressive trader with high-speed technology to front-run the sale in an attempt to profit from the coming move.Investment banks established dark pools to attract institutional sellers to a secretive and anonymous market to prevent front-running. The bank charges a fee for the service. Dark pools are very controversial and came under added scrutiny after Michael Lewis authored "Flash Boys," which shed light on shady dark-pool activity.SwapsInvestment bankers sometimes make money through swaps. Swaps create profit opportunities through a complicated form of arbitrage, where the investment bank brokers a deal between two parties that are trading their respective cash flows. The most common swaps occur whenever two parties realize they might mutually benefit from a change in a benchmark, such as interest rates or exchange rates.Market MakingMarket making works best when the bank has a large inventory of stock with high trade frequency. The bank can quote a buy price and sell price and earn the small difference between the two prices, also known as the bid-ask spread.Investment ResearchMajor investment banks can also sell direct research to financial specialists. Money managers often purchase research from large institutions, such as JPMorgan Chase & Co. (NYSE: JPM) and Goldman Sachs Group Inc. (NYSE: GS), to make better investing decisions.Asset ManagementIn other cases, investment banks directly serve as asset managers to large clients. The bank might have internal fund departments, including internal hedge funds, which often come with attractive fee structures. Asset management can be quite lucrative because the client portfolios are large.Investment banks also partner with or create venture capital or private equity funds to raise money and invest in private assets. These are the fix-and-flip experts in the business governance world. The idea is to buy a promising target company, often with a lot of leverage, and then resell or take the company public after it becomes more valuable.As I said at the beginning, it is easy to look at the big investments that banks engage in and be tempted to say that investments would make much more money for banks, but also remember that investments are also very risky business, while fees are deducted from your account regardless to your say-so and at the banks convenience. So there you are, there’s a lot of information to absorb, hopes that it helps.