But that's not how it works.
You get interest on fixed deposits, over a term. Cash is cash and customer funds cannot be touched.
In fact certain central banks will cover the customer deposits.
See Silicon Valley Bank
Discussion
A loan contract can have an insurance contract on top, especially if the insurance fund is unlimited by decree...why the hell not? 🤣
That doesn't mean the contract is somehow not still a loan.
I'm not talking about contracts.
Every bank is regulated by their central bank issuers. These banks have a mandate, in fact in most places it's law that depositors funds are not touched i.e. used for anything other than just holding in the account.
Where the interest earned on savings comes in is rather inflationary hedges, so very very small percentage in comparison to a fixed deposit or, as you say, contract for say 2 years at 10%. That money fixed for two years by the customer can be used by the bank as investment vehicles.
So savings accounts aren't loans to the bank. It's YOUR money. In fact most offer savings accounts as an extra service, because it's not a generator of income for them unlike their other banking services.
Many people will fix their money into a higher yielding CD like 1 or 2 years. This is money the bank has access to.
Now I'm not saying bankers don't skirt the law and steal customer funds (this happens) but that's why there is the law in place to protect customer deposits vs customer investments - after all, the central reserve can literally print back the money you lost from the bankers.
I just don't think it makes sense to say it's not a contract, then invoke "law", as to the reason why it's also not a loan. That line of thinking gives me intellectual whiplash. 🤷♂️
a bank deposit is not a loan to the bank
Whatever helps you sleep at night 🤝