JPMorgan Chase earned $27.1 billion in net interest income last quarter. Here is how banks make money on the gap between what they pay savers and what they charge borrowers, and what that gap means for the cash in your own account.
Key takeaways
- Most of a big bank’s revenue comes from net interest income: the interest it earns on loans minus the interest it pays on deposits.
- The average US savings account paid just 0.37% in September 2026, while credit cards that charged interest averaged 22.36% in August.
- You can’t change how banks work, but you can choose which side of the spread your money sits on.
The news in brief
On October 13, 2026, JPMorgan Chase, the largest US bank, kicked off the third-quarter earnings season. It reported net income of $15.3 billion, or $5.57 per share, up from $14.4 billion ($5.07 per share) a year earlier. Revenue rose 8% to $50.2 billion.
Reuters noted that earnings per share came in below the $5.85 analysts had expected, the bank’s first profit miss since late 2023, as dealmaking and bond trading cooled. But the core of the business kept growing. Net interest income reached $27.1 billion, up 13% from a year earlier. Excluding trading, it was $24.7 billion, up 6%. The bank credited higher deposit balances and more credit card lending, partly offset by lower rates. Average loans rose 10% to about $1.6 trillion.
Chief executive Jamie Dimon said the US economy “continued to be fueled by strong business investment and ongoing consumer spending,” and that growth in the card business “continued to be robust.”
The basic idea, explained
A bank is, at heart, a middleman for money. Some people have cash they don’t need right now, so they deposit it. Other people and businesses need cash they don’t have yet, so they borrow it. The bank sits in between.
It pays depositors a small amount of interest to hold their money, then lends that money out at a higher rate. The difference is called the spread, and the total it produces across all of a bank’s loans and deposits is net interest income. Banks also earn fees, from trading, advising companies and account charges, but for most banks the spread is the main engine.
Think of a fruit stand. The owner buys apples from a farmer at 30 cents each and sells them for $1. The 70-cent gap pays for the stall, the staff, the apples that go bad, and leaves some profit. A bank buys money from savers (with interest) and sells it to borrowers (with more interest). The “apples that go bad” are loans that are never repaid. JPMorgan’s card business, for example, wrote off 2.91% of its card loans as uncollectable last quarter, which is part of why card rates are high.
Here’s what matters for households: banks don’t have to pay every depositor the same rate. Many people leave money in a checking or basic savings account and never shop around, so the bank can pay them very little. That’s why the national average savings rate is far below the Federal Reserve’s benchmark rate, whose target range currently tops out at 4.00%. Banks that want to attract more deposits, often online banks with lower costs, tend to pay more. (For how the Fed’s moves feed into these rates, see what the Fed’s rate hike means for your mortgage and savings.)
A worked example
Let’s use real averages. According to FDIC data published by the St. Louis Fed, the national average savings rate was 0.37% in September 2026. Some online banks advertise rates around 4% (Bankrate’s October list tops out at 4.27%). Suppose you have $10,000 in savings and leave it alone for five years. For simplicity, we compound once a year and assume rates stay the same, which in real life they won’t.
| Account | Rate | After 1 year | After 5 years |
|---|---|---|---|
| Average savings account | 0.37% | $10,037 | $10,186 |
| Higher-yield savings account | 4.00% | $10,400 | $12,167 |
The math: $10,000 × 1.00375 ≈ $10,186, and $10,000 × 1.045 ≈ $12,167. Same money, same safety if both accounts are FDIC-insured, but a gap of about $1,980 over five years.
Now look at the other side of the spread. The Federal Reserve’s data show that credit card accounts that were charged interest paid an average rate of 22.36% in August 2026. Carry a $5,000 balance for a year at that rate and you pay roughly $5,000 × 0.2236 = $1,118 in interest, or about $93 a month (a simplified figure; actual card interest is calculated daily on a changing balance).
Put the two together and you can see the spread from a household’s point of view: earning $37 a year on $10,000 of savings while paying $1,118 a year on $5,000 of card debt.
What you can do
- Check the rate on your savings. Look at your latest statement or banking app for the APY. If it’s well below what other insured banks offer, it may be worth comparing.
- Confirm deposit insurance. Before moving money, make sure the bank is FDIC-insured (or the credit union is NCUA-insured), and remember the standard $250,000 limit per depositor, per bank, per ownership category.
- Tackle high-interest debt first. Paying down a card at 20%+ usually saves more than any savings account earns. Keep a cash cushion, though; our guide to building an emergency fund explains how much.
- Read the fine print on “high” rates. Some offers are introductory, capped at a certain balance, or require minimum deposits or activity.
- Keep checking money separate. Leave enough in checking for bills to avoid overdraft fees, and let longer-term savings sit where they earn more.
This is general information, not financial advice.
Key terms
- Net interest income: the interest a bank earns on loans and investments minus the interest it pays on deposits and other borrowing.
- Spread: the gap between the rate a lender charges borrowers and the rate it pays for the money it lends.
- Net charge-off rate: the share of loans a lender writes off as unlikely to be repaid, after any recoveries.
Sources
- JPMorgan Chase third-quarter 2026 earnings release (SEC filing, Exhibit 99.1)
- Reuters: JPMorgan posts rare profit miss as dealmaking, bond trading lose momentum (Oct. 13, 2026)
- FDIC National Rate: Savings, via FRED (St. Louis Fed)
- Federal Reserve: Commercial bank interest rate on credit card plans, accounts assessed interest, via FRED
- Federal Reserve: Federal funds target range, upper limit, via FRED
- Bankrate: Best high-yield savings accounts, October 2026
Written by The Daily Economy editorial team with AI assistance and checked against the sources above. Read our editorial policy.