Banks grant credit (bank money) when debtors promise to work.
Your money is effectively a share in the bonds that banks hold onto. In other words, the point of banks is not for people to store their money and earn interest, it's to provide liquidity and a trusted intermediary. When the bank pays interest it basically tells you to keep your money to make room for the investment spending. You and a company want to buy a car, you say the company should go first and you wait until the next car is produced.
In theory you could do the same thing without the bank by writing an IOU saying you work x hours and then use that as money. The problem is that people have to trust you and the IOU is not fungible (it may be worth $4k when all you want to buy is $50 worth of groceries).
This verges on pedantry in this context. Banks are required to have a certain amount of capital in reserve to make loans (the reserve requirements and capital adequacy ratios set by central banks). Deposits from consumers give the banks the reserve capital they need to make those loans.
Without a way to use the deposits to make money the banks would just as soon not have your money.
Not if these loans are secured then they can make as much money as they want from thin air.
> Deposits from consumers give the banks the reserve capital they need to make those loans.
No. At least in the US, they just need to secure the loan with an asset that can be held from the dealers. Most of the time, if you got your mortgage from a bank, they'll just liquidate for real cash.
> Without a way to use the deposits to make money the banks would just as soon not have your money.
Which is why, in this new system, banks have become hostile to customers. Banks are no longer in the business of helping customers but trading money market funds.
Those are 0% or effectively zero in most developed nations.