How it Works?
So as you know, when you open a new Bank account depending on how your bank deducts New Account Balances ( at least in Belgium your account receives 10% more money on your first deposit) you can either lose or gain money. lets just pretend we are banking in Belgium, you deposit 500 Euros, and its your first time with the bank, the banker who you are working with will smile and say, welcome to the bank, as a thank you for your business you received another 50 Euros. So you now have 550 Euros, the account balance annually ( meaning at the end of every year regardless if you created the account December 31st at 11:59:59 pm) you still receive the Annual Rebate Amount, again depending on your bank rebates, the bank i work for is 1.5%, youre account will then be, assuming you didnt withdraw or deposit anymore money shall then increase to 555.50 Euros. ( 1.5% of 500 euros is 5.50, but since you also received a First time Banking Bonus with the bank, the bank must now pay 1.5% of 550.50 so your balance will be 558.75[1.5% of 550.50 is 8.25])
Why Would the Banks give me money, when i don't really do anything in the first place?
The Reason why you receive a Rebate on your account in the first place is because what banks do is, they take your money, and usually Loan it out to other bank members. Now Banks Charge Interests on Loans, so the Interests received is kept by the bank so the bank can remain open to pay off its utilities and employees. Another way banks make you money is that they'll invest your money in promising Ventures, such as housing Development, or businesses , some will even invest in other banks, and when the Investment owner, pays off his investors, A small Percentage of what the bank makes is then evenly given out to its members.
What if i withdraw some of my money will i still get the Rebate?
You Still can access your money but when you withdraw money that the bank invested, the bank will simply just deduct money from its stockpile and give it to you. Your account will still receive the 1.5% increase, but only on what is in the account ( if your account balance is 0 then you will still have 0) so say you withdrew 50 euros, your account balance will then be 500.50 euros, so when the 1.5% increase comes in at the end of the year, the account balance will only be 505.50
So why would my accounts be Frozen?
Typical Reasons would be if your account is under investigation by Government officials,
or if you become a known Criminal as the bank does not want to be affiliated with known criminals, even if nothing is proven, the bank will still cut all ties with you
If you owe another bank money or if you owe alot of tax money, the government can freeze your assets and even seize the bank account.
What you Should Know!!
It is not recommended to Borrow large sums of Money, if you go to a bank and say id like to apply for a loan, and the amount asked for is larger than 5,000 Euros (Its the Law in Belgium to advise against this) The banker will advise that you make sure you want that much, as if you are unable to repay loans on time the consequences can be harsh, and if you completely fail to repay it, You may lose your Job, Your Home, your Vehicle, your Credit may fall down the drain, and you could even be arrested if you lose the ability to repay your taxes which further complicate your financial situation.
Banks have gotten in law ( at least here in Belgium) to Have it set as, if you should commit suicide or pass away your debt will be passed on to the most well off family member so that they can insure your debt is payed, if you had life insurance the banks would negotiate with your insurance to give a sum of it to the bank( if you owed them money) so that your closest well off family member wouldnt have to pay so much.
Debt Reduction Agencies
these agencies will work, however depending on your debt they will ask for a one time payment, say you owe 100,000, they will ask you for 2,000 and say ill get your debt down to 25,000 Euros, and the reason why they ask for 2,000 is because they are usually owned by other Rival Banks, so then the rival bank will then tell your bank, look, he or she owes us a lot of money as well, so lets work something out, he pays us X amount of money ( they wont say that you owe 2,000 usually the tell your bank you owe a larger sum to them than you owe your bank) and he or she pays you 25,000 would you rather he or she pay you that, or pay you nothing? and your bank says fine, and your debt is reduced to 27,000 ( because you paid the Debt Reduction Agency 2,000 Euros)
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