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explains banking
banking system?
Answers
Answer:
A banking system is a group or network of institutions that provide financial services for us. These institutions are responsible for operating a payment system, providing loans, taking deposits, and helping with investments.
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Answer:
Banking is an industry that handles cash, credit, and other financial transactions. Banks provide a safe place to store extra cash and credit. They offer savings accounts, certificates of deposit, and checking accounts. Banks use these deposits to make loans. These loans include home mortgages, business loans, and car loans.
Banking is one of the key drivers of the U.S. economy. It provides the liquidity needed for families and businesses to invest in the future. Bank loans and credit mean families don't have to save up before going to college or buying a house. Companies use loans to start hiring immediately to build for future demand and expansion.
How It Works
Banks are a safe place to deposit excess cash. The Federal Deposit Insurance Corporation (FDIC) insures them.1 Banks also pay savers a small percent of the deposited amount based on an interest rate.
Banks are currently not required to keep any percentage of each deposit on hand, though the Federal Reserve can change this. That regulation is called the reserve requirement. They make money by charging higher interest rates on their loans than they pay for deposits.
Explanation: