Banking refers to the services provided by financial institutions, such as accepting deposits and providing loans. Banks are financial institutions that are licensed to operate by regulatory bodies, such as central banks or financial supervisory authorities. The primary purpose of banking is to facilitate the movement of money in the economy by helping people and businesses store, invest, and borrow money. There are several types of banks, including retail banks, commercial or corporate banks, and investment banks. Retail banks offer consumer credit products like mortgage banking, personal loans, credit cards, and debit cards, while commercial banks work with large businesses and corporations. Investment banks, on the other hand, help companies and governments raise money by underwriting and selling securities.
Banks also provide related services such as individual retirement accounts (IRAs), certificates of deposit (CDs), currency exchange, and safe deposit boxes. They allow people and businesses to deposit, borrow, and transfer money. Banks lend money, generating interest that creates profits for the bank and its customers. They also provide jobs for professionals like tellers and loan officers.
In most countries, banks are regulated by the national government or central bank. They provide essential financial services like depositing, lending, and asset protection to support the economy. Banks allow people to access their money when they need it and provide "one-stop shopping" for financial needs from investments to home and auto loans, along with other financial services. Convenience, along with interest rates and low fees, are major selling points for banks.
