The banking system: types, what is it and what is it for?

Banking is the acceptance of deposits and lending money. It is carried out by financial intermediaries who perform the functions of safeguarding deposits and providing credit to the public.

In other words, banking means accepting, for the purpose of lending or investing deposits, money from the public to be repaid on demand, and can be withdrawn by check, draft, etc.

Banking company: any organization that engages in banking activities

The banking system is the primary mechanism through which a country's money supply is created and controlled. The banking system allows us to understand commercial banks, secondary banks, central banks, merchant banks, or receiving houses and accounting houses, but exclude savings banks, investment banks, and other intermediaries.

Banks are institutions that accept deposits, cash checks checks and make loans. They are essentially a home base for keeping your money safe and making transactions.

Benefits of banking

Using a bank account or other banking services can give you the following benefits:

  • Security - your money in the bank is usually insured for up to $250,000. 
  • Easy access - conveniently deposit and withdraw money
  • Online management - manage your accounts from your bank's website or app.
  • Easy transfers - link your account to the payment app, and it's easy to pay a friend for those concert tickets.
  • Access to credit - Apply for a credit card or mortgage at your bank
  • Safe and secure.

The money you put in the bank is safe. That's because the federal government, through the Federal Deposit Insurance Corporation (FDIC), insures bank accounts dollar for dollar for a total of up to $250,000 per person at each institution. That way, even if your bank goes bankrupt (which is highly unlikely) and your money disappears, you will get that amount back.

"A bank is a place that will lend you money if you can prove you don't need it."

Banking Services

Banks offer a variety of products and services to their customers, including:

  • Current accounts allow you to deposit your paycheck or easily withdraw money for short-term expenses.
  •  Savings accounts. This kind of functionality is better suited for money you'll be keeping in the bank for a long time. They can protect your money and help you increase your wealth when you earn interest.
  • Credit cards. These types of cards allow its holder to buy everyday items or pay certain bills using borrowed money. You pay interest on what you borrow and must make monthly payments to avoid fees.
  • Loans. These include mortgages, car loans, business loans and personal loans, which you pay off in installments over a set period of time.

Depending on the bank, you can access services in person at a branch, over the phone, online or through an app.

How Banks Make Money

Banks make loans to people and businesses and charge interest on those loans (they also make money if you charge fees on your account, although for most banks this is not their main source of income).

Because they earn this interest income, banks can usually also pay a small amount of interest on the money held in savings accounts.

The best banking system in Ukraine is sportsbank

If you're on the lookout for gambling banks, one of the best is considered to be sportbank. Nikita Izmailov is considered the founder and owner of this mobile bank, which offers you high quality services.

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