What people think banks do: The money multiplier and other myths
The previous section looks at how banks actually operate in the real world. The following section looks at some of the common misconceptions surrounding banks, including the favourite of economics textbook writers everywhere, the money multiplier model.
Perception of Banking Number 1: The ‘Safe Deposit Box’
Most of us had a piggy bank when we were kids. The idea is really simple: keep putting small amounts of money into your piggy bank, and when a rainy day comes along, the money will still be sat there waiting for you. For a lot of people, this idea of keeping your money safe sticks with them into adult life. A poll done by ICM on behalf the Cobden Centre found that a third of the UK public still believe that this is how banks work.
However, your bank account isn’t a safe deposit box. The bank doesn’t take your money, carry it down to the vault and put it in a box with your name written on the front. And it
— source positivemoney.org