What is a bank?

A bank is a business that both receives and lends money. Both of these functions are dependent on each other. In order to lend money for someone to buy a home or car, a bank must first attract deposits. It attracts deposits by paying interest. The bank then must earn money by receiving interest from loans it makes.

In order to make sure this process runs smoothly, banks are very careful and must follow very important rules. Banks have to insure all deposits. That means that banks guarantee you can get your money back when you want it. Banks can only make loans to responsible people they are certain can repay in a timely manner. Banks also have to keep a certain amount of their money on deposit in a Federal Reserve Bank, the bank’s bank! Because all of these rules plus many others are followed so closely, banks are very safe places to keep your money.

Mercantile Bank has been receiving deposits, making loans, and providing many other services since 1906. We are FDIC insured. This means that deposits up to $100,000 are guaranteed by the Federal Deposit Insurance Corporation. Mercantile Bank is also an Equal Housing Lender. This means that we lend money to anyone who can repay their loan, no matter what their gender, race, age or religion.