The banking industry is one of the most popular, profitable and fast-growing financial industries worldwide. The banks which offer variety of financial services like investments, savings, investments, mortgages and even financial education are one of the foundation stones of our economy. Heavy government involvement is what separates the banks from other financial industries. The government sets restrictions on the amount of deposits the banks should hold and their borrowing limits. The government has a big influence on the bank’s profitability.
Importance of banking services
Having banks anywhere makes it seem very common and ordinary. However, we cannot afford the absence of banks. Depositing money in the banks is more than just like safe-keeping to most businessmen and average citizens. It is for safety and convenience. Due to the banks’ nature as support of businesses and commerce as part of their financial services, transactions in this industry - deposit and withdrawal of money is very fast, make it offer relatively not-so-big interest rates even on long-term savings.
Maximizing banking services
With its capability to fast move the money, the banks are the most qualified financial institution to hold “emergency fund” or short-term savings. On the other hand, funds intended for future use or long-term investments meant for retirement, educational plans, memorial plans, etc. can have more opportunities to grow in other financial entities.
Credits, loans and mortgages are also offered by the banks. Credit cards are one of the major businesses of the banks. So are housing loans, car loans or salary loans. As part of their financial services, the banks offer minimal interest rates for these loans. Since banks are able to facilitate faster money movement, it is a good middle entity to also transfer money from one financial institution to another. It is used for the convenience of paying bills as electricity, water, telephone, credit cards, savings plans, loans, mortgages, etc. Many modern banks are now engaged in internet banking, where the depositor can make funds transfer, pay bills and even trade stocks over the internet.