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Why Banking Works So Well

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					Why Banking Works So Well


to what is the most effective, reliable, and secure means to manage your money, and
that is through the bank. Your bank is an effective means to manage your bills
payments, keep track of your transactions, receive your income and whatever extraneous
cash inflow, and help you save effectively.


The last one is perhaps the most obvious feature of the bank that people do not take
advantage of. A bank, being a financial intermediary, can actually help you save money
efficiently. Heres how.


First, you are required to keep what is called a maintaining balance in your bank
you to save a bare minimum in order to continue enjoying their services. And yes, that
translates to a forced saving on your part.


Another feature of bank saving is the fact that you are free to continuously add to
your account whenever you can. Otherwise, your money will remain safe in your bank.
Moreover, while its staying in the bank, you are actually earning interest rates on
your money.


your money in the bank. By depositing your money in the bank, your bank utilizes a
portion of it in its loan operations where it subsequently earns through interest and
loan charges. In effect, the income they receive trickles down to you, their source of
you save more money in your bank account through your deposits and savings, you end up
receiving a higher return on the savings interest rate than other people would.


Banks have a threshold amount for you to be able to participate in the banks
long-term, higher yield savings schemes. Time-deposit accounts, mutual funds and the
for the banks use of your money for a longer period of time, the percentages of
interest return are double those that you would get in a regular savings account. You
can add increments of a certain amount in order to increase the capital you invest in
your time-deposit account or mutual fund. An increased account obviously translates to
bigger interest gains.


Talk to your local bank about their savings schemes. They offer various mechanisms to
encourage us consumers to entrust their money to them. In a bank, your money is in a
safe place, and it is growing while it stays there.

				
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Description: Budget and Saving Money Tips