banking

Banking Terms -> banking

• Banking refers to a number of activities related to receiving money on deposit and current accounts, making advances to clients, paying and collecting checks, extending loans, and other banking activities.
  
  Banking activities are carried out by banks and other financial establishments. They accept funds deposited by savers on current accounts and issue debt securities like bonds and banknotes. Banks also invest in market securities, make advances, and give out instalment loans. Banking establishments offer a variety of payment methods and services, and bank accounts are considered an important part of the work of governments, businesses, and other institutions. Remittance companies are an example of non-banks, which offer payment services, but these cannot substitute bank accounts. In general, banks perform a number of activities. They invest in securities, make loans, issue bank drafts, certify depositor’s checks, and collect notes, drafts, and checks, Banks also receive time deposits and demand deposits and pay interest on them.
  
  Banking and other financial services can be accessed through a variety of channels. Banking transactions can be conducted through online banking and mobile banking. Online banking allows clients to make transactions on secure websites, maintained by building societies, credit unions, virtual banks, etc. Many US banks and other financial establishments offer online banking services. Among them are the Bank of America, ING Direct, U.S. Bank, and Citibank, among others. Telegraphic and wire transfers and bill payments are made possible. Clients can use online banking to pay bills, review transaction history, transfer money, view credit card account activity, and more. Online banking makes it easier to track payments anytime. It is easy and convenient to view one’s account and balances, check transactions, add alerts, etc. Clients can create budgets, prepare for tax seasons, track investments, and even view accounts held at other financial institutions. Mobile banking, also called SMS banking, mbanking, and M-Banking, can be used to make payments and account transactions, fill out credit applications, and carry out balance checks. These are done through devices like Personal Digital Assistant or one’s mobile phone. Apart from mobile and online banking, other services include telephone banking and video banking. Transactions are made over the phone with telephone banking, and clients do not communicate with a human operator. A remote audio or video connection is used in video banking for banking consultations and banking transactions. Banking can also be done in retail locations and branches, as well as via call centers and ATMs.
  
  Banking is a major driving force for the US economy. Banks provide a safe place for extra cash, which is known as deposits. Banks also ensure the liquidity of the economy by lending money to businesses, thus helping them grow and expand. Bank clients also borrow money to buy homes, vehicles, big-ticket items, and various consumer products. Banking establishments offer various types of loans, including personal and business loans, education loans, mortgages, auto loans, and many others. Borrowers can choose between secured and unsecured loans depending on their creditworthiness and requirements. Banks charge interest rates to make money and pay for deposits. In general, the interest rate represents a percent paid or charged for the use of money. When funds are borrowed, interest is charged, and it is paid when money is loaned. Banks pay interest when money is deposited and use it to extend loans. Borrowers are charged higher interest rates so that banks can profit from their services. When interest rates go up, fewer businesses and people can afford to pay off loans. Economic growth is slowed down in this case. More people are able to save by receiving more on the savings rate.

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