With all the recent bank turmoil and bank runs, it's a good reminder to be cautious with our money. It's important to remember that the modern banking system is based on fractional banking, which means banks are heavily leveraged.
For example, let's say you deposit $100 into your bank account. The bank only needs to keep a fraction of that deposit (let's say 10%) in reserve, and can lend out the remaining $90 to other customers.
This is how banks make money, by charging interest on loans. But ...