Bank products are the facilities provided by the banks to their customers. Banks provide various range of bank products, from current to saving accounts, loans, and mortgages. These bank products help you to manage your money.
Bank products are integral parts of your financial life; these products help you borrow money, save for the future, make investments, and manage smaller tasks (paying bills).
How Bank and Bank Products Work?
Banks play an essential part in managing the flow of money between people and their businesses. More specifically, it offers deposit accounts to keep your money safe. The money from the deposit accounts is used to give loans to people or businesses. In return, banks receive interest amounts on the loans from the borrowers. And this interest is returned to the deposit account holder as an interest.
Primarily, banks make money from the interest on loans or the fees which banks charge from their customers. These fees can be collected through various bank products. Like, a bank may collect may an application fee before granting a loan or a mortgage loan.
Types of Banks:
Banks are not similar to one another. However, there are various types of banks that offer different products and services.
- Central Banks: central banks usually manage the supply of money for a country. These banks are responsible for overseeing the movement of currency or setting monetary policy.
- Commercial banks: commercial banks usually facilitate businesses and corporations. These banks also serve the needs of individuals.
- Retail Banks: retail banks offer services to the general public. Retail banks offer saving accounts, retirement accounts and checking accounts.
- Community development banks: these banks are privately owned banks that primarily focuses on social responsibility and sometimes it is supported by the federal government.
- Credit union: a credit union is financial institution that is run and supported by the its members. These nonprofit organizations that offers loans and accept deposits.
- Investment Banks: investment banks make money through investing customers money or their own money. These banks offer investment advices to the customers.
What Are The Most Common Bank Products?
Bank products are the services provided by the banks. Bank products will help you to expand your business by providing various services and save your time to focus on gaining your business goals rather than focusing on collecting funds.
Here are the most common bank products:
Number One: Credit Card
A credit card is a post-paid card that allows you to draw money from the credit line money and gives you a fixed time period to pay back. If you fail to repay the loan within a fixed period of time, you can be charged with interest.
A credit card is merely a small, with which you can purchase goods and services. The bank receives the bills and pays on behalf of the cardholder. These bills are collected in the bank, and the cardholder is supposed to pay them in a set period of time. The cardholder is charged a small amount for this service. These days, credit cards are getting popular, because most people prefer to pay bills with credit cards instead of taking cash with themselves.
Number Two: Debit Cards
A debit card is a pre-paid card with some stored money. Debit cards subtract money from the card holder’s saving account when they take out money or pay for something. Using a debit card, you pay for every expense with a swipe, and the amount is paid from your account. There is no need to carry cash with you if you have a debit card.
Number Three: Automated Teller Machine
An Automated Teller Machine enables you to complete the basic transactions without a bank branch or human teller. These machines are used by the banks to facilitate their customers to perform routine banking at any time. This product helps you to withdraw money from your bank account, even if the banks are closed. This can be done by inserting your card in the ATM and entering your pin code.
ATMs are currently becoming popular worldwide. It provides the customers with the facility to deposit or withdraw funds, check account balance, transfer funds, and check the account statement.
Number Four: Electronic Funds Transfer (EFT)
An electronic fund transfer is the most popular method of transferring funds from one account to another through computer networks. With the introduction of EFT, banks are dispersing the use of paper cheques.
This system helps you to transfer funds speedier from any bank branch. An EFT can be initiated by any business or institution simply with a bank account.
The Bottom Line:
Different types of banks offer different products and services to facilitate the customers. These bank products help you to expand your business without worrying about money. With these bank products and services, you can manage and save your money.
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