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Informative Articles

A Guide to Low Cost Secured Loans
The idea of low cost secured loans might sometimes seem like nothing more than a fantasy. it doesn't have to be, however. Low cost secured loans can be found, even for individuals with less-than-perfect credit; it's all a matter of knowing where to...

Home Improvement: Loans to Build Your Very Own Comfort Zone
Home is your sanctuary. The place you go back to every night and somehow it doesn't seem right. Your home is an expression of who you are and if you walk out each of a place that you does not seem to belong to you then probably your home needs...

Payday Loans - To Make Ends Meet Until Your Next Payday Cheque
It is easy to tackle with financial emergencies when you have enough money with you even at the end of the month. But, this seems impossible as most of us usually end up spending most of our pay on shopping and satisfying other personal purposes in...

Personal Loans – The Reasons And Effects
More and more people are deciding to borrow. The statistics show that the level of personal debt is rising at among the highest rates in the world. This is occurring as more and more people are asking themselves, why wait for the things you want...

Secured Loans for Homeowners: The Best Choice For Borrowers
Homeowners in UK can use their home equity to get a secured loan. Designed exclusively for the homeowners in UK this loans carries very low interest rates. The collateral being offered by the property or home equity, secured loans for the...

 
Today's Banks Are Not Just For Mortgages, Loans and Investments

In today's capitalist world where security is one of the utmost concerns, the typical problem facing an individual is financial security. Money-related questions typically asked are: "Where can I keep my money? What is the best way to invest it and make it grow? Who can I borrow money from?" And the answer: a bank - a financial institution dealing with financial concerns.

Banks are known to provide financial services, from storing assets (liquid or otherwise) to extending credit. From a bank customer's point of view, this translates to services ranging from making deposits to asking for a loan. People are now even capable of paying their bills and most of their purchases thru different banking methods.

Historically, banks have been seen as heartless and opportunistic. They were seen as vicious businesses victimizing the innocent and honest. Of course, eventually, through time, this view has drastically changed. Banks today are one of the highly-respected and successful business establishments in the country. Now that people are more educated about the banking operations, they have learned to trust these businesses with not only their savings and assets, but with other transactions as well.

It is said that the word bank came from the Italian word banca, which came from Germany and means bench. Money lenders (now popularly known as "loan sharks") from Northern Italy used to conduct their business in open areas, each working from his own bench. Similarly, the term bankrupt (which means broke) was derived from the term banca rotta, or a broken bench.

Now, I'm sure you've heard of central banks, savings banks, commercial banks, private banks, etc. What differentiates one from the other? There are many types of banks.

In a nutshell, here are some of the more popular ones and what commonly distinguishes each from the others:

Central banks are usually charged with controlling the monetary policies, including the money supply. They are also tasked with the printing of paper money. Savings banks traditionally offer services like savings and mortgages. But at present, they have expanded to offer other forms of financial assistance. Commercial banks usually offer financial services to large corporations or businesses. Private banks manage the assets of the ultra-rich. They are usually located in jurisdictions with low taxation and regulation (Yes, those infamous Swiss banks and Swiss accounts...).

There are also merchant banks, which provide capital to firms in the form of shares rather than loans; investment banks, which deal with selling of stocks and bonds and with advising on mergers; retail banks, where the primary customers are individuals and; universal banks, which offer diversified financial services and engage in several different banking activities.

How does such a business earn its money? Traditionally, a bank's main sources of income come from transaction fees from its range of financial services and from the interests it charges for its loans. But in the past years, banks have evolved to ensure their continued profitability despite the changing market conditions. Banking, investment and insurance functions were merged to cater to the consumer's "one-stop shopping" mentality.

Indeed, banks have come a long way from the time they conducted their business on benches. They are changing because people are changing. And it all started on the day when man felt that his valuables were no longer safe in his own home. After all, anyone can sleep more peacefully at night knowing that his assets are tucked away in a secure place.

About the author:

David Arnold Livingston is a business owner and money manager with many years of successful financial experience. Visit: http://www.fenbanks.com/ for lots of great banking information and ideas.

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