Banking has become an integral part of our lives when it comes to personal finance. Banking institutions help an individual to safe-keep their money also with a return.

“A bank can be defined as an institution that accepts money (deposits) from the public (individuals and other institutions) and creates credit with that money.”

Any excess money after consumption can be advised to be held at a bank as the interest received from the bank to the depositor can mitigate the decrease in value of money through inflation. So, on face value, your deposits will see a growth over time.

Banks are a very low risk source of investment as they are highly regulated by the financial and monetary regulatory bodies of a country. Due to this low risk, the depositors will also enjoy a low return for their deposits. However, there are different investment schemes with banks (Eg: teen savings and elderly savings and fixed deposits) to attract depositors. So, despite being a low yielding source of wealth creation, banks still tend to be the #1 choice for investing money due to ease of use and requirement of literally 0 knowledge on investing.

There are many different forms of banks (Central, Commercial, Community development, Cooperative Credit, union, Custodian, export credit agency, Investment, Industrial, Merchant, National, Offshore, Private, Public, Retail, Savings, Online etc.) and equally varied amount of banking products (Savings account, Fixed deposit account, Money market account, Certificate of deposit (CD), Credit card, Debit card, Mortgage, Mutual fund, Personal loan, Time deposits, ATM card, Current accounts, Cheque books, Automated Teller Machine (ATM), Internet banking) to cate to different personal financial requirements.

Having a working knowledge of banks and their services and what they can offer you in terms of financial planning will help you design your financial goals.