Banking is a generalized term, which describes the variety of services offered by banks, which accommodate and look after money owned by individuals, businesses and other corporations. Some of these services may also include:
- Credit and debit cards
- Debt consolidation
- Cash machine services
- Transferring money to other bank accounts
- Standing orders
- Direct debit
Banks accept money from savers and lend money to borrowers, which encourages the money to flow, some of which is placed into investment which allows growth in the economy. Banks rely on the trust of those securing their money there in order to operate. It is usually safer to keep money in a bank rather than at home as banks have secure safes in which the money is kept. They also offer returns on savings accounts, which means your money has the potential to grow from the investments the bank chooses.Origins
In 2000BC in the regions of Assyria and Babylonia loans were given of grain to farmers and other traders who traveled between cities. But between the medieval and Renaissance period in Italy is where the origins of the modern banking system can be found. In the 14th Century banking was primarily controlled by the Bardi and Peruzzi families and the first known bank was called the Banco di San Giorgio and was founded in Genoa, Italy, 1407.
In the 17th and 18th Centuries Merchants began to store their gold with goldsmiths who had private vaults and they charged a fee to provide this service. For the metals deposited by the merchants they gave them receipts, which verified the quantity, and purity of the metal and the receipts could be used by the depositor to collect the metal when they wanted it. The goldsmiths then started lending money out and this was the start of the banking practices we see today.Specifics
Online banking offers easy access to control your bank account, giving you more autonomy over what you would be able to achieve by going into your local branch for example, set up a direct debit or transfer money between your accounts. Their websites also offer information about the other services they offer for example saving for retirement, getting a mortgage or borrowing money. Online banking websites are secure and may require different levels of security such as setting passwords, key words or numbers or answering security questions before allowing you to log in. They should also have some protection against fraud and identity theft, so read their policies carefully before signing up.
Revised January 25th, 2016
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