It is the same when you borrow on that account.
With respect, I think you have mistaken notions of how borrowing works.
The way banks work is that you put money in the bank, the bank pays interest, and the money from the interest comes from loans. No loans no interest. Loans means dollar creation.
How banks lend is really one of the keys to understanding economics. You are correct in that banks create currency, but the way they do it is not the way most people believe.
There is one currency that can be created one of two ways.
1. The government creates it when it spends.
2. Banks create currency via balance sheet expansion.
The difference is, the government has no obligation to repay the money it creates,
ever. Not to be confused with band sales and repayment, that does not create money.
Banks on the other hand MUST repay money it creates.
Banks pay interest because the Fed pays interest. However, even the Fed can only create currency though expanding it's balance sheet. The Fed works closely with the Treasury to accomplish its mandate given to it by Congress.
Banks pay interest on savings. Money in your savings adds to the banks reserves. The Fed pays interest on reserves called
Interest on Reserve Balances (click the link to see the latest rate) today's rate is 5.15%. Right now the range that banks are paying are 0.5% all the way to 5% or more, the reasons for the wide margins is that some banks have plenty of reserves, while others are trying to attract reserves.
To your last point, loans create dollar creation, this is true, but don't forget that every loan created by a bank creates 2 assets and 2 debts.
The borrowers asset is the money they borrow, the Banks asset is the promissory note the borrower signs. The Borrowers debt is the money that must be repaid. and the Banks debt is the money it creates and deposits in the borrowers account. Of course the bank "wins" in the end because the borrower is expected to repay more than they borrowed. Interest is the reward for taking risk. What risk? If the borrower does not repay, the money is taken from investors (unless there is an '08 style meltdown, but we'll cover that if you're interested.
Suffice it to say, the government and ONLY the government creates new perpetual money (though the government can chose to reduce money in circulation). Banks create credit by taking risk. The credit they create is denominated in the governments dollar, but every dollar created by a bank has a date when it will be deleted (also known as loan repayment).
If that sounds confusing, I understand.
If you have questions or what to challenge my understanding, please ask.
Respectfully,
EG