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BANKS
Banks are financial institutions that invest money deposited by customers, pay out money when needed, make loans with interest, and exchange currency. (https://goo.gl/xUWPID)
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You can think of BANKS as places that protect money.
There are around 7,000 banks (and credit unions) in the US
Thousands of people go to banks everyday.
Banks play a large role in the economy.
Thousands of people go to banks everyday.
Banks play a large role in the economy.
WHY DO BANKS EXIST?
Well, there's 3 simple answers.
It's a place that can 'hold' your money.
It helps you save money; not having it directly in your hand, like cash.
Lastly, it's a place that can protect your money.
It's a place that can 'hold' your money.
It helps you save money; not having it directly in your hand, like cash.
Lastly, it's a place that can protect your money.
Banks can also make money off of the interest on the money they lend to borrowers and charging fees for services.
THE GREAT DEPRESSION: THE STOCK MARKET CRASHES.
The US Stock Market crashed in October, 1929. This was a huge and dramatic downfall for the US economy, and led to the Great Depression.
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Many people during these times were scared of losing money, so they performed a "RUN ON THE BANKS." This term describes when tons of costumers go to a bank AT ONCE and all withdraw money.
Since banks do not keep all the money they collect, banks at the time did not have enough money to give back to everyone. This caused some banks to go bankrupt and close. |
DO BANKS HAVE RISKS?
Banks really have no risks, except for when borrowers do not pay their loans off.
It honestly doesn't matter when a bank gets robbed of the money because of FDIC.
Banks really have no risks, except for when borrowers do not pay their loans off.
It honestly doesn't matter when a bank gets robbed of the money because of FDIC.
FDIC stands for the Federal Deposit Insurance Corporation. It was established in 1933 and provides insurance for deposits in US banks.
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FDIC advertisments appeared almost everywhere; in newspapers, bank windows, etc., after the Great Recession to remind customers that their money is insured. This was to prevent the Great Depression and Great Recession from happening again.
[ THE FEDERAL RESERVE ]
The (central) bank of the US is the Federal Reserve. (the FED)
The US Congress established the FED with the 1913 Federal Reserve Act. |
How did the FED respond to 9/11?
Well, with the attacks being where the World Trade Center was, the amount of investments dropped due to the fall in the stock market. After the attacks, the FED decided to provide any LIQUIDITY, the ability or any way to make payments. |
credit unions
BUT Banks are owned by SHAREHOLDERS.
Internet Only Banks are banks that can only be accessed online. The bank only has one location, which is most likely the headquarters.
(image: https://goo.gl/yd1CfD)
Not to mention the fact that building locations for banks are pricey. With the amount of banks, rent for locations adds up. By decreasing the number of banks, it could save thousands of dollars.
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AS FOR SOME OLDER GENERATIONS or individuals that prefer person to person contact, they'll continue to go to traditional banks. Of course, there's nothing wrong with that. Yet, the number of traditional banks will probably start to decrease, though.
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There are also banks that have ONLINE versions too. Even popular banks like, PNC or CHASE.
You can do everything online; that you can do in the banks. You can pay bills, make withdrawals, deposits, etc.
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Online Banking is quicker, it's free to make an account, and you don't have to worry about the mailing system or stamps.
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The banks will try not to make mistakes because they'll lose customers.
CHECKS: another a way of paying.
Checks are small paper slips that you can use to pay. You can cash in checks at banks; where you can take the money as cash, or put it into your checking account.
You can fill out checks by writing the date, your address and name, who you are paying, what you are paying for (memo), the dollar amount [written in word form as well], and finally signing your signature.
(disclaimer; example is not specific)
- Write the written dollar amount and signature in cursive. WHY? It's harder to forge.
- Write the dollar amounts all the way to the left of the line and box. This is to prevent someone writting false information if someone gets a hold of the check.
- Cross out or scribble out the rest of the line on the written dollar amount in order to prevent someone writting false information in that space.
Banks play a great role in the economy. There's so much to banking, it's hard to fit the gist of it on one page. Banks are important and can help you.
Banks can be quite confusing when you first learn about it, but with a little patience and research you can learn the topic inside and out. Everyone should get the opportunity to create a bank account and use banks the way they were made for.
Banks can be quite confusing when you first learn about it, but with a little patience and research you can learn the topic inside and out. Everyone should get the opportunity to create a bank account and use banks the way they were made for.