Why do banks offer interest rates?
Your money doesn’t sit in a savings account untouched. When you open an account, you give your bank access to lend your money out to others.
Banks reward you for that access with interest, even if those rates are slightly lower than the rate they charge borrowers. It’s how they stay in business.
And if the bank loses money on that loan, it doesn’t affect your account balance. Furthermore, the vast majority of banks, financial institutions and credit unions are insured by the CDIC, so even if they go out of business, you’ll get up to $100,000 back.