Banking 101: Importance of Banks

The Importance of Banks
Banks are financial institutions that are licensed to keep your money through withdrawals and deposits which may be owned or regulated by a central bank or the national government. They are vital institutions for the nation and the economy to function properly.
However, other than the essential part it plays to regulate the regulation and distribution of a nation’s money, banks are also important for the individual citizen. Here are three reasons why banks are important.
1) Banks are secure.
When you were a kid, you probably stashed the extra cash you had under the bed or in a piggy bank or in the corner of your underwear drawer. However, all these mentioned places are vulnerable. Your home, however safe you may think it is, is prone to disasters, natural and man-made. The cash under your bed could be left behind during a fire and burned to a crisp. Your piggy bank could be smash opened and your cash be stolen. Your underwear drawer could be drowned in a flood or hurricane. Worse, you could just altogether forget where you hid your money. Basically, the home is not an ideal place to keep your money.
Banks were made for the specific purpose of keeping your money for you. The key is to choose a legitimate bank protected by a legal insurance company. For example, in the US, banks under the FDIC or the Federal Deposit Insurance Corporation proved to be reliable despite times of financial crisis. Your money is really just safer in a bank.
2) Banks are convenient.
Banks provide convenience and practicality. With the rise of the internet, banking has changed forever. Aside from the thousands upon thousands of ATMs or automated teller machines that you can access anywhere there is available, online banking has also become available, allowing you to transfer money, pay bills and purchase stuff on the web. You can also keep track of your finances online, on your laptop, tablet, or phone.
3) Banks offer saving and investing.
Besides keeping your money safe and accessible to you, banks also offer the opportunity for your money to grow. By simply depositing money on a bank, it accumulates interest. There are also options for time savings, where you agree to keep your money in the bank at a specified time for increased interest rates. Investing is also an option to make your money work for you.
Banks have long stood the test of time as the keepers of wealth. Take advantage of the opportunities they provide. Save and invest.