Hmmm, interesting idea.

 

i like the idea of a bank account that earns interest. i am surprised that an economy server doesn't have one as its a big part of economies around the world. and a way to "bank" exp would be of great use, so low ranked players could "save up" to enchant their armor or tools.

 

I would be interested in this but can you add maybe more interest and I can put more money in?

 

Id deposit 10k, my whole bal, but I wanna know what interest I get.

 

So 10k deposit= 500/day rate?

 

Ill think about depositing

 

Meet you ig wenesday or friday!

 

So pst is
1 pm -5 pm for Monday to Friday,
9 am-3 pm saturday
And 11 am-4 pm sunday
Kk sounds g00d!

 

Sunday then.

 

You might want to check your math on those interest rates... 0.05% as a decimal, is 0.0005, not 0.05 (5%). Assuming this is daily interest and the interest is compounded, multiplying it by .05 means I could double my money in 15 days, quadruple it in just 4 weeks, and in a year, 50k would turn into 2.7 trillion! In that case, I'd like to invest :p

50k would earn $25/day at 0.05% (3k is 6%), 10k would earn $5/day (500 is 5%), and in the op, it says 50k earns 3k/week, which is ~0.857%. These interest rates are all over the place...

Aside from that, is interest actually compounded daily, or just added somewhere else to be collected? Is there a limit to how soon we can take our deposit back out? What happens if a loan falls through, is there protection on our money? Do we still get the daily interest if it is protected and it falls through?

 

Lol you cant let me have 500/day?! :p :D

 

True was looking at this and was seriously confused. There is also a discrepancy if it is per week or per day. One term Blazeinfinite said day, the next he said a week. I'd suggest a week unless you magically create money I'll invest a few hundred thousand then. If you truly mean 0.05% that would mean 0.05/100 is your decimal to multiply by which is equivalent to 0.0005.

Also are you doing simple or compounded interest. With short terms like this it would be a wise choice to choose simple over compound unless you really would like to make money for me that much.

If I give you $50,000 and you simple interest on a weekly basis it would be $25 per term(week).
Principal + term1interest
Principal + term1interest + term2interest
Principal + term1interest+ term2interest + term3interest
And so forth.

The bank would pretty much be pointless at such a low interest rate.
A 2.5% interest rate I say would be worth something at the very least at 50,000 you would have to add $1250 per week. Doubling money every 40 weeks. (100/interest) Seems reasonable, but if you can't keep up it would become a problem.


In addition concerning loans

To give a loan it would be easier to bind everyone into a contract with your permission. It would be relatively simple to do and effective means of security.

Assuming loans would be sold to primarily Builders and Residents and also assuming you can perhaps acquire 3 of these a week we can do a little simple math for what would be reasonable to fund a 2.5% interest rate on your borrowed money.

15,000 * 3 = 45,000
85,000 * 3 = 255,000
45,000 + 255,000 = 300,000

Perhaps this is a point where you would like to suggest a 50,000 bank minimum and increments in 10,000 only allowed

This would require 6 bankers giving you 50,000 giving you a total of 300,000
With a 2.5% interest rate you will be dealing with 7500 in payouts per week.
That is actually almost nothing to deal with but you don't want to use your own money. You use loan interest.

7500/6 we will need 1250 minimum gain on each loan just to cover loses, but since we are a bank to make profit, we need double that. Minimum $2500 on each loan, but mayor loans are definitely not going to only be $1250 profit.

Fix loans at a set number, and do not fiddle with the math. Give out 15,000 and 85,000 if the borrower has money and wants you to only give them the difference do not. Give them the full amount and they can do the difference on their end. All the matters is you receive exactly what you ask for.

With a 15,000 loan we can safely assume borrowers will be capable of paying back 20,000 in a week. That is 15,000 profit per week which will easily take care of the interest money on the initial borrowers (we will call these bonds for distinction).

Here we can also insert some options for borrowers, builder would find it beneficial to add in more money to take care of a farm, (we could use a partnership with a farm town), and to purchase a tool from the server (~7,500)
​

With a 85,000 loan we can safely assume borrowers will be capable of paying back 100,000 in 2.5 weeks time. The user will have already established a way to farm etc. this is 45,000 in profit every 2.5 weeks which we can calculate weekly for... 18,000/week profit.

Total lending will gain you 25,500 per week. This could be distributed among "investors" or it could be simply used to factor into how much you can pay back your bond buyers. (Initial borrowers or bankers) <-- interest rate.

 

Seeing as this idea is similar to existing banks on ECC including my own I'll give you some advice/pointers. I'm not annoyed that you "copied" anyone's idea because it's such a broad idea with many possibilities, banks existed before mine and will exist after yours.

So, your initial post isn't very clear, if I were to invest I have no clue what I'm getting myself into. Interest rate is 0.05% (According to your post) and that's worse than real life banks, if you meant 5% then that's a crazy high amount to be giving out per day, or even per week. Above posters have already covered a lot of this.

I take a lot of investments, holding almost half a million total currently. I give a lot of loans too, also in the millions (total) so I'd like to say I know what I'm doing. After working with investors for some time, you come to realize that people like to be assured that their money is saved, and that there's a nice return involved for them. If I loan out $500,000, you get scammed it all from someone and are paying out interest, that's a huge loss for you and really makes me worry about what's happening with my money.

Some of my investors money has been delayed, some scammed and so forth. I'm sure they'll get worried here too, communication is essential. If you want to be a functional bank, you'll be experiencing a LOT of losses. At my current rate I lost about $50,000 to $100,000 a week total. Not cool. Doesn't look good either, but if you're able to compensate for this then you'll do well.

How do you compensate for the losses? You need money. You say you have $50,000 to loan out, how much money is owed to you? How much are you able to liquidate in the situation that something goes wrong? What if all your loans are scammed? By the looks of things, if you're scammed $50,000 you'll be pretty screwed, even more so if it's somebody else's $50,000. Having a big capital to begin with is almost needed if you're taking investors.

If something goes wrong with your investors money, it's lost for example, then how do you re-pay the investor. You either don't, you work your butt off mining/farming/whatever, or you take money out of your personal "wealth". Expect a lot of losses.

Finally, this is from personal experience and not meant to offend you but I've seen you lotto a lot, there can be a fear that if Player A invests X money, that you'll lotto this money away and lose. I've loaned to you before Blaze and often that's spent on lotto, again no offense intended just stating my past experience. Personally, I lotto too, but not for profit, just for a bit of big-money fun.



I wish you the very best with it all, it'll be good to have some friendly competition, funny how you own a casino and a bank ;).