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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.

Find the best banking rates, best bank accounts and more in your region or state:

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Most Read Banking Articles

Why Mobile Payments Will Never Replace Cash

With the success of Apple Pay, and as more and more businesses adopt mobile payment systems, it seems like cash might be going the way of the checkbook. But here's why can we actually never expect bills and coins to become totally obsolete.

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If You Thought Overdraft Fees Were Scary, Check Out These Haunted Banks

Here are seven haunted banks that will give you the goosebumps, are you banking at one of them?

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Chicago-Based Alliant Credit Union Raises Savings Rate to 0.80% APY — 6.2 Times the National Average

CHICAGO, Oct. 29, 2014 – GOBankingRates client Alliant Credit Union has hiked its savings dividend rate to 0.80% this month — 6.2 times the national bank average — offering members in Chicago and across the country an opportunity to grow their money faster and improve their financial well-being. This rate, which represents a bump of...

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Altier Credit Union Brings Dave Ramsey’s Financial Literacy Curriculum to Local Students

PHOENIX, Oct. 29, 2014 –As part of its commitment to promoting financial literacy in its surrounding community,GOBankingRates client Altier Credit Union announced this month that it is sponsoring Dave Ramsey’s “Foundations in Personal Finance”curriculum for 80 students at Tempe High School. The course, which uses interactive learning techniques to explain key principles from Ramsey’s best-selling...

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Alliant Credit Union Now Offers Denver Members a Savings Rate That’s More Than 6 Times the National Average

DENVER, Oct. 29, 2014 – Helping members in Denver and across the country grow their money and increase their financial well-being, GOBankingRates client Alliant Credit Union has raised its savings rate to 0.80% APY, a dividend that’s 6.2 times the national bank average. The 10-basis-point hike, which was implemented Oct. 1, applies to all balances...

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GOBankingRates Recognizes Alliant Credit Union for Its Stand-Out National Education Program, Granting Students Computer Gift Cards

CHICAGO, Aug. 14, 2014 – With school back in session, GOBankingRates recognizes client Alliant Credit Union for encouraging Chicago students to start saving early by entering in its National Education Program, through which it will be awarding nine members computer gift cards ranging between $250 and $1,000. The premier personal finance website seeks to recognize...

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5 Chilling Bank Fee Horror Stories

These people saw their money disappear without a sound -- or a trace. Find out how you can keep it from happening to you.

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Pacific Marine Credit Union Sponsors USO San Diego Tuesday Night Dinner

PMCU volunteer team (from left to right): Nancy Harvey, Kate Baker, Sandra Spendlove, Wendy Rodriguez, Kathy Speliopoulos, Tina Wyse-Harvey, Erica Young, Jessica Herrera and Kendra Buksas. Oceanside, Calif., Oct. 27, 2014 – As part of its ongoing commitment to members of the armed forces,GOBankingRates client Pacific Marine Credit Union sponsored USO San Diego Tuesday Night...

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The Best Banks and Credit Unions

Both operate on similar terms with some differences. Banks and credit unions are financial institutions where deposit and loan products can be obtained. Because national banks are bigger than credit unions, they have the financial backing to offer higher interest rates, better customer incentives, and more branch locations. Credit unions, on the other hand, are nonprofit cooperatives where account holding members become shareholders in the organization. So while a credit union may be smaller in scope than a great deal of banks, customers have more stake, or share, in the organization’s financial future.

With both types of banking establishments, all deposits up to $250,000 are insured under federal law — for banks, the insuring agency is the Federal Deposit Insurance Corporation (FDIC), and for credit unions, the National Credit Union Administration (NCUA).