Connect with us

Markets & Finance

How Banks Work? A Complete View

How Banks Work? A Complete View

As we all know banks are the ones that use our money in order to earn money. They use money that is deposited by other people like us. Banks lend our money the needy people and in return they charge them higher interest rates and they earn money. Whenever we deposit money in banks they use this money to give loans to the needy people with higher interest rates than the interest rate they give us on our savings. And this is the easiest way of earning money. Same is the case with San Francisco Banking as well.

How Banks Work? A Complete View

Deposits:

Whatever money we keep in bank, it is considered as a deposit and this deposit is kept by the customers in order to keep money safe for future transactions and in order to earn a good amount of interest. These are generally referred to as core deposit. People usually open two types of bank accounts one is current and other is saving. In the case of saving bank account bank gives interest but in the case of current account customers don’t get interest. Usually these deposits are kept for short term but in the case of savings account people use to keep money for at least a year so that they get interest on the money. Customers have all the rights to withdraw his whole money any time he want.

Wholesale Deposits:

These deposits are the ones that are kept by people for a long period of time for example fixed deposits. These are the deposits that are kept on bank for long term and so banks gives more and more respect to such deposits. If some bank is not able to get such deposits then they go for inter-bank CD. Some bank usually doesn’t allow branch wise deposits in order to generate huge wholesale deposits.

Share Equity:

Deposits are the primary source of income for banks as they can lend that money to others as loan. Shareholder equity is the most important part of bank capital. There are many regulatory that are dependent on amount of shareholder. Common equity is usually straight forward. This is the capital that are generated when bank sell out its shares in the market. While there are big banks that often pay the dividend amount but there is no requirement to do so.

Use of Funds:

The deposits that are done by the customers, is primarily used for giving loans and this is the main aim of the banks to earn money.

Recent Posts

Home Improvement2 months ago

How To Add More Value To Your Home

If you have some spare cash in the bank, it is likely you would like to spend it on your...

Lifestyle2 months ago

What is a Deep Plane Facelift

Cosmetic surgery is a choice that needs a lot of research and when it comes to thinking about a facelift...

Entrepreneur2 months ago

Unveiling the Demand for Digital Marketing Courses: A Comprehensive Analysis

In recent years, the realm of marketing has undergone a seismic shift propelled by the digital revolution. As businesses increasingly...

Home Improvement2 months ago

What Does an Effective Wardrobe Spring Clean Entail?

Spring is upon us which means one thing and one thing only. It is time for the annual purge of...

Business4 months ago

Your Basic Guide To Creating A Unique Investment Blog

Starting your own blog is great and once you get the ball rolling, it can be a good passive income...

Business4 months ago

3 Low-Risk Ways To Get Your New Business Started

Once you’ve got an initial business idea and believe that it will be a success, there are some basic things...

Lifestyle4 months ago

Conquering the Co-free Zone: Tips for Thriving as a Remote Worker

Adjusting to an office environment can come with its downfalls in the sense that it might be a shock to...

General5 months ago

3 Ways To Take Control Of Your Finances Starting Now

If your finances have taken over and are bringing stress to your life, we understand just how overwhelming it can...

Travel7 months ago

Best Places To Visit In The North Of England

If you live in England, you will know there are many different places to visit for the weekend. There are...

General7 months ago

Green Home Improvement Ideas

In a world where environmental concerns are growing, the concept of “green” has gone beyond a trendy catchphrase and is...

Lifestyle7 months ago

How to Host an Unforgettable House-Warming!

The time has finally come. You have moved into your dream pad, and are officially adulting in your very own...

Autos7 months ago

A Guide to Parking Lot Striping

The journey to a well-striped parking lot begins with the right paint. In this brief guide, we’ll unravel the mystery...

Business10 months ago

Business Tips For Protecting Your Finances During A Recession

In 2023, taking the necessary steps to protect your finances for your business is now more important than ever. The...

Lifestyle10 months ago

Tips For Cleaning Your Trainers

If you’re into your trainers and streetwear, you’re likely to be very conscious of keeping them looking their best! So,...

Marketing11 months ago

Branding Trends For Start-Ups in 2023

Branding is incredibly important as it impacts how your business reaches and connects with its target market. If you’re branding...

Categories

Archives

Trending