What banks actually do with your deposits, and what you can do yourself
As seen on the 24/7 Wall St. homepage on October 9, 2026.
Banks use your money to support their other products (giving car and mortgage loans, investments etc). >Can I just go and invest in that *something* to cut out the middle man? Yes, you can buy your own mutual funds and stocks.
The spread your bank earns between deposits and loans buys you instant liquidity and zero credit risk, neither of which a DIY loan book replicates. 155 comments landed on the same point, that chasing the bank's return means taking the bank's risk.
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A post by BallerGuitarer on r/personalfinance drew 155 comments asking why you should not cut out the middleman and invest your savings directly yourself. The top answer, from mrkmrrsn, is that yes, you can buy your own mutual funds and stocks.
Banks primarily use deposits to fund loans, including car loans, mortgages, and commercial lending. The spread between what they pay you on a savings account and what they charge borrowers is where their profit lives, and replicating that spread yourself means taking on the same credit risk, compliance obligations, and record-keeping burdens that banks are built to absorb.
A high-yield savings account or CD gives you something a DIY loan book cannot: the ability to withdraw your money whenever you need it. If your savings were tied up in a single mortgage loan, you could not pull it out to cover an emergency.
Chasing the bank's return means taking the bank's risk, and a bank spreads that risk across thousands of borrowers. An individual doing it alone concentrates it, so a single default lands with no pool of other loans to absorb the loss.