What is banking? | Meaning and Functions of a Bank|

banks remember your piggy bank this is the first bank that we all had and no off but we cannot keep all our money in a piggy bank you must have heard your parents talking about bank accounts credit cards etc have you ever wondered what these terms mean the place where people deposit their money and can borrow money for an interest is called a bank banks perform various functions like taking deposits giving loans transferring or receiving money offering credit cards debit cards etc the account in which an individual’s money is kept is called a savings account.

The savings account holder can withdraw the money from his account as and when required an interest is paid on the savings in the account however if an individual wants to get better interest then he can open a fixed deposit banks also give loans for various purposes like building a house buying a car or setting up a business the bank charges interest on the loan in olden days one had to visit a bank to perform all banking transactions like depositing the check withdrawing money transferring money to another person etc.

But now banks offer a lot of convenience children do you see your parents visiting the bank often they don’t need to because most transactions can be done without going to the bank for example every month your parents salary gets directly deposited in their bank account but how can one access the money in the account now suppose your father needs to pay the monthly rent he has an option to issue a check to the owner of the house a check is a payment instruction from the account holder to his bank directing to pay a sum of money to the person specified in the check you must have accompanied your parents to the ATM to withdraw money and must have seen them using cards for payment while shopping so what is an ATM and what are these cards apart from the drawing money ATMs can also be used for other banking services such as checking account balance bill payments etc.

ATMs provide service round-the-clock and a customer can vid draw cash up to a certain limit during any time of the day or night do you know how the money gets transferred from one bank account to another this is Rishabh a college student studying in Delhi his parents live in Mumbai Rishabh needs 10,000 rupees urgently he has a bank account of his own if his parents send him a check firstly they would need to mail it to him and then he has to deposit it and it will be a few days before he can get the money instead his parents can either transfer the money through internet banking or mobile banking internet banking or mobile banking allows individuals to carry out banking transactions from anywhere and at anytime without needing to visit the bank all that one requires is an internet connection and to register for online mobile banking facilities with the bank one can use this facility to transfer funds pay bills check balance etc.

While online banking needs the use of a computer mobile banking can be done using your mobile phone internet banking and mobile banking are tools to transfer the money reshubs parents need to use either real term gross settlement RTGS or national electronic funds transfer an EFT to transfer money to reshubs account with these new technologies one can transfer money instantly the important features of RTGS and NEFT are a nationwide funds transfer system supporting the transfer of funds from any bank branch to any other bank branch anywhere in India one needs to submit complete details such as receivers name account number bank name city branch name etc to ensure smooth and swift transfer of funds the details of the beneficiary can be submitted at the bank or through internet banking in case of RTGS. The minimum amount would be 2 lakh rupees per transaction there is no minimum or maximum limit for transferring money through NEFT children hope you understood the importance of bangs and how they make our lives easy you

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