How do banks make money...

I believe everyone has asked himself at least once in their life this question.Well the the banking system is not that complicated , every person who posses at least a general education can understand it.So let me explain it to you as simple as I can.
       
In simple terms Banks make their money from lending out money to consumers and businesses in need of loans by using depositor funds such as savings accounts and checking accounts. The way the bank makes a profit is by charging an interest rate for those seeking loans. The bank offers free checking to induce more depositing customers so they can in return lend out more money ultimately making more profits.But because depositors need their money from time to time they have to keep part of it in reserve to be able to pay out withdrawal requests.. The percentage they have to hold onto in reserve varies depending on the type of account.In more simple terms banks make money by lending money at a higher interest rate than they pay on deposits. The gap is the profit margin.