THE MONEY WELL
Banks & Banking
THE MONEY WELL
Copyright @
Atomic Kickstart 2006
Credit Card
Debt Reduction
Atomic Kickstart 2006
Credit Card
Debt Reduction
Sponsored Links
For a great deal on your car insurance go to insure
About Banks & Banking
What is Banking and how do banks operate?
It's fairly simple really. People store their money with a bank and the bank pays them a little extra, the interest, for having the use of their money. The bank then loans the money out to other people and charges them a bit more interest than they pay the person lending them the money. The difference between the interest they charge the borrower and the interest they pay the lender is their profit. So banks are basically, middlemen who take a commission out of dealing with other peoples money.
They provide various additional services as well such as foreign currency exchange and investment advice but their basic reason for existance is simply to borrow and lend money to other people and companies.
Most peoples experience of banks is through the use of cheque or current accounts. These are accounts for handling day to day money as compared to savings accounts which are usually for longer term savings.
Typically your wages or salary will be paid into your current account and you can then draw cash out and pay bills from that account.
What is Banking and how do banks operate?
It's fairly simple really. People store their money with a bank and the bank pays them a little extra, the interest, for having the use of their money. The bank then loans the money out to other people and charges them a bit more interest than they pay the person lending them the money. The difference between the interest they charge the borrower and the interest they pay the lender is their profit. So banks are basically, middlemen who take a commission out of dealing with other peoples money.
They provide various additional services as well such as foreign currency exchange and investment advice but their basic reason for existance is simply to borrow and lend money to other people and companies.
Most peoples experience of banks is through the use of cheque or current accounts. These are accounts for handling day to day money as compared to savings accounts which are usually for longer term savings.
Typically your wages or salary will be paid into your current account and you can then draw cash out and pay bills from that account.
Copyright Moneywell.co.uk 2007
Recommended Links
Recommended Links
