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Banking Fundamentals

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Banking Fundamentals


Do you ever have trouble keeping track of all the financial concepts you need to know? Have you ever wondered where I got my banking knowledge from?

Well, dear reader, it turns out that there are no shortcuts to becoming a finance expert. It takes years of studying and learning how things work before you can understand them on an intellectual level. That’s why we’ve put together this list of fundamentals for those who are just getting started in the world of banking!

Banking Fundamentals include the following:

Savings Accounts

Savings accounts are for people who don’t have a lot of money to invest and would like to save it for the future. They’re also great for people who want to avoid paying fees since you can withdraw your funds anytime without incurring any penalties.

Savings accounts come in many different varieties: standard savings, high-yield savings, money market accounts, and CDs (certificate of deposit). The main difference between these types is that some offer higher interest rates than others—but all provide access at least once every few days or months depending on how long you’re willing to lock up your cash.

Interest

Interest is the money that banks make on top of what your loan amount is. It’s calculated on a daily, monthly, or even yearly basis depending on how often you’re paying back your loan. The interest rate can be compounded or simple and charged as a flat rate or percentage of the total principal amount of your loan (which means that if you borrow $10,000 for 5 years at 10% interest then each month you’ll pay another $100 in interest).

However, there are also other factors to consider when determining whether it’s worth taking on a new credit card from your bank:

Your credit score plays an important role in determining how much interest rates banks charge when lending money out. Lenders typically look at several different factors including how many times someone has been late paying their bills over the past two years; how many accounts they’ve opened in recent years; if those accounts have any unpaid balances attached; and even their overall financial situation like whether they live paycheck-to-paycheck or have steady income coming into their bank account every month.

Checking Accounts

Checking accounts are designed for checking, so you can write checks on the account and make deposits.

Check writing is one of the most basic uses of a checking account. You’ll use it to pay bills and make purchases when you can’t get cash from an ATM (or if your debit card has been declined).

Overdraft protection allows you to overdraw your checking account without paying interest or fees. If you overdraw your balance by more than what’s available in the account, then the bank will cover any difference between what was withdrawn and what was deposited back into that same day—for example, if someone withdraws $200 but only deposits $150 back into their account that day; in this case, they would not be charged any fees because their balance had been reduced by $50 due to overdraft fees being applied as per normal procedures at banks across America today.

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Online banking allows users to access their financial institutions’ websites 24 hours a day 7 days per week via computer terminals located somewhere within reach of those same terminals at home offices’ premises where employees spend most mornings doing nothing but browsing social media news feeds while sitting comfortably behind desktops instead.

Loans

Loans are a way to borrow money. Most loans are short-term, but they can also be long-term. You will often see loans as either secured or unsecured.

Secured loans require collateral such as real estate or vehicles for you to get the funds you need from your lender. Unsecured loans do not require any form of collateral and may have lower interest rates than secured ones, but there is always the risk that if you don’t pay back on time (or at all), your assets could be seized by the lender.

Mortgages

A mortgage is a loan that you bring out to purchase a home. It can be used for houses, apartments, and other commercial real estates. Mortgages are long-term loans with terms of up to 30 years.

Mortgage rates have fallen since the 2008 financial crisis and banks are more willing to lend money at low-interest rates now because they don’t want to lose money on bad investments or loans being paid off early by borrowers who cannot afford them anymore due to job losses during that period.

Credit

Credit is a loan that you pay back over time, usually with interest. Credit cards are a type of credit and they have an interest rate—how much you pay in addition to the original amount.

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If you want to use credit, it’s important to understand how it works so that you can make informed decisions about whether or not it’s right for your situation.

Insurance

Insurance is a direction to insure yourself against monetary loss. It can be used to protect you against the risk of death, injury, and loss of property.

Insurance companies are businesses that provide insurance policies for specific events or risks. They do this by offering plans with different levels of coverage, such as property insurance that covers damage to your home in case of theft or fire damage; personal liability protection (legal responsibility for injuries inflicted on others); auto insurance that pays out if someone gets into an accident while driving; homeowners’ and renters’ policies which cover expenses incurred through natural disasters like floods or hurricanes; life insurance that pays out if you die prematurely from an illness contracted during childhood and so forth.

Conclusion of Banking Fundamentals

With these fundamentals in mind, you can now begin to choose the banking products that best suit your needs.

Now that you’re armed with this knowledge, you can start to understand how banking works and what it takes to get a loan. Learning about bank fundamentals is an important step in becoming a responsible borrower who understands how their money works.

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