Perhaps one of the greatest breakthroughs in civilization is the concept of banking. Banking paved the way to the creation of bigger corporations, complex institutions, more secure financial transactions, and global economic interdependence. People manage money through banking to make sure that the heard earned money that they acquire stays safe, healthily anchored in a national market, and easily accessible without having to hold on to the money itself.
Banks have been introduced since approximately 3 B.C. when temples held resources in terms of grains and other produce for commercial trading. Modern banking which standardized banknotes as currency was established during the 1500s and marked a new era of western banking as well.
Since then, banking has been brought to new heights with the introduction of technology which allowed virtual banking while still being associated with real-world currency. Faster transactions and larger volumes of money can now be transferred to any point in the globe with a global banking system with just a click of a button.
Managing money has been developed in consistency to provide ease of understandability and utilization for the common citizen as well. This ensures that a healthy banking and economic environment is maintained.
The most common and simplest form of a way to manage money through banking is by opening a personal account. This is then given an option of how the account should act, either as a savings account or a checking account. The former is the most basic form of savings with a fixed interest rate, as well as a minimum balance to prevent account closure.
The latter is designed to allow individuals who handle a larger amount of money to transact and pay without having to go to the bank and withdraw a large amount of money, thereby exposing themselves to danger. Checks are tendered as legal bank notes, holding power to be converted to cash by the recipient.
Time deposit accounts are fairly simple in nature. It is similar to a savings account, but only that there is a fixed matrix set by the bank for client compliance in terms of the amount of money deposited. This is of course corresponds with the appropriate interest rate and benefits, should the amount in the matrix be higher.
There is one main catch for this type of managing money which is that when the individual engages on this savings type, the money that was deposited is waiting to mature before it can be manipulated. Otherwise, the interest rates and benefits are not honored or curtailed in the process.
Credit Cards And Debit Cards
Credit cards and debit cards are two of the other alternatives to do banking. These are electronically crafted items that can be used to serve as a portable resource. Establishments supporting these types of transactions credit the expenses directly to the bank holding that account for any charges that are billed to the owner of that card. Though this is a convenient and safe way to not bring any cold cash around, the risk of getting victimized by fraudulent activities such as credit card information hacking and the like also exposes the user to a level of threat with his money and resources.
A credit card is a feature given by a bank to its client to be able to buy in advance and be billed later on and deducted with the appropriate charges incurred over a monthly cycle plus taxes and charges. A debit card is more of a limited credit card that allows the user to transact with an electronic card with establishments, only that the amount of charges that could be incurred is based on the actual money in that account and nothing more.
It is a tricky concept to manage money through banking if not understood correctly. It is therefore encouraged to the clients to read the fine print, andthe terms and conditions as well for the different bank policies.