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All you need to Know About Banking

Banking describes the products and services we use from financial institutions, like banks, lenders or credit unions. Banking is the act of spending and saving, borrowing and loaning, buying, selling and investing through a financial institution.
Every time money exchanges hands, or a transaction is made, banking takes place. No matter how big or small the denominations are, the way we bank our money has a great influence on the economy -- by paying or investing in goods and services, banking determines supply and demand, drives commerce, and decides market value. In banking, it's important to remember that interest plays a significant role for the banker and the consumer. With a deposit product, like savings or checking, account holders can earn interest; the amount one receives is calculated according to a figure called an APY, or Annual Percentage Yield. For loans, a banker or lender charges a borrower interest to pay back; in this case, the rate is called an APR, or Annual Percentage Rate.
Here are some of the best bank accounts on the market today:
  • Savings: A savings account is a place to safely deposit and store money, at a specific interest rate, with the intent of withdrawing at a later date.
  • Checking: Checking accounts are a convenient way to keep immediate finances in one easy-to-access place for paying monthly bills and other regular expenses.
  • CDs, IRAs and Investments: Certificates of deposit is like a savings account where money matures over a fixed, set period of time. IRAs and 401(k)s are also other banking products which are useful for saving for retirement. Other investments include stocks, bond funds, and more.
  • Auto and Mortgage Loans: Lending is when a party loans money to a borrower with the understanding that the funds will be paid back, with added interest on top of the principal.

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