subject: Learn More about Banks, Banking and Types of Banks [print this page] Learn More about Banks, Banking and Types of Banks
Banks are institutions designed to safeguard money, provide credit and loans, offer payment services like checking accounts, cashier's checks and debit cards. Banks also offer insurance products and investment options. Much of the traditional distinction between banks, securities firms and insurance companies has diminished and banks have begun to offer a wider variety of options. In spite of these changes banks still perform and maintain their primary role of accepting deposits and lending money.
Banking has two parts monetary authorities, central bank, and depository credit intermediation. The U.S. Federal reserve system is the United States central bank. The Federal Reserve manages the Nation's money supply and international reserves, holds reserve deposits from domestic banks and the central banks of other countries. The Federal Reserve also issues the dollars we use as currency. The credit intermediation and other related services provides banking services to consumers and businesses. It secures the money of the depositors, provides debit car and checking services and lends money to consumers and businesses through car loans, investment loans, mortgages, lines of credit and credit cards.
There are three basic types of banks: commercial banks, credit unions and savings and loan associations. Although some of the differences in these types of banks has lessened recently there are the key differences. Commercial banks offer a full range of services for governments, individuals and businesses. They come is a variety of sizes including small community banks, large global banks and mid-size regional banks. Global banks offer typical banking services as well as foreign currency exchanges and international lending. Regional banks often have many different branches and ATMs, in a multi-state region to provide banking services to individuals and local businesses. Community banks are locally based and have only a few branches. Online banks have begun to grow in success and offer financial services entirely over the internet.
Credit Unions are a depository institution that are formed by people with a common bond such as a community, job, or union. Only people with this bond can become members. Savings accounts and loans are restricted to members. Credit Unions are nonprofit organizations that are governed by a board elected by the members.
Savings banks and savings and loan associations are also called thrift institutions and are the second largest group of depository institutions. They were first established as community-based institutions to finance mortgages so people could buy homes and these institutions still cater to the savings and lending needs of the consumers. The distinctions between savings banks and commercial banks has largely disappeared. If you are interested in learning more about banking and Finance we offer thousands of answers to questions and much more.
