Banking is the act of making deposits and withdrawals from a bank account. Banks offer many services to their customers including checking accounts, savings accounts, credit cards, loans, mortgages, and much more. Many people use banks to store money they earn throughout the year and then withdraw it at times of need. However, not everyone uses banks for these purposes. In fact, some people prefer to keep their money outside of the traditional banking system. These types of businesses are called non-bank financial institutions (NBFI). NBFI\u2019s provide similar services as banks but do not have the same regulations.<\/p>\n
Non-bank financial institutions (NBFIs) are companies that provide financial services to individuals and businesses. NBFIs may offer products and services similar to those offered by banks. They may also offer additional services not provided by banks. Most NBFIs are regulated by state governments and follow rules set forth by the federal government. There are two main categories of NBFIs: commercial banks and credit unions. Commercial banks are regulated by the Federal Reserve System while credit unions are regulated by state regulators. Credit unions are considered to be mutual organizations whereas commercial banks are considered to be private corporations.<\/p>\n
Alternative banking refers to any type of business that provides financial services without using traditional banking methods. Examples of alternative banking include check cashing stores, payday loan shops, pawnshops, and money orders. Alternative banking is often seen as a way to avoid unnecessary fees charged by traditional banks.<\/p>\n
Peer-to-peer lending is a method of borrowing money from friends and family. People who borrow money from peer-to-peer lenders are known as borrowers. Borrowers pay back the lender over time. If the borrower does not repay the loan, the lender may take legal action. Peer-to-peer lending can be risky for both parties involved.<\/p>\n
Microlending is a type of peer-to-peer lending where small amounts of money are lent out to borrowers. Microloans are generally between $100-$1000. Microlenders are able to lend money to borrowers because they know their friends and family members personally.<\/p>\n
5. Community Development Financial Institutions<\/p>\n
Community development financial institutions (CDFI\u2019s) are financial institutions that focus on providing capital to low income communities. CDFIs are different than microfinance institutions because they are focused on larger projects. CDFIs work with local governments to develop affordable housing, build schools, and create jobs.<\/p>\n
The Community Reinvestment Act (CRA) was passed in 1977 and requires banks to meet certain requirements. The CRA states that banks should make home mortgage loans available to qualified families regardless of race, color, religion, national origin, sex, age, marital status, or economic status. The CRA also requires banks to help low-income families obtain safe and sound housing.<\/p>\n
1. Bank Accounts<\/p>\n
A bank account is a place where money is stored. In business banking, a bank account is a way to keep track of how much money you have coming in and going out. You may use a checking account to deposit money, a savings account to save money, and a credit card to spend money.<\/p>\n
2. Credit Cards<\/p>\n
Credit cards are plastic pieces of plastic that allow people to pay for things using their own money. A credit card company gives a person money (called a loan) to buy something. When the person pays back the money plus interest, he or she gets his or her money back. If the person does not pay back the money, the credit card company keeps the money.<\/p>\n
3. Checking Account<\/p>\n
A checking account is a place where you put money to use. Money in a checking account can only be spent at places that accept checks. Checks are paper pieces of paper that tell someone to give you money.<\/p>\n
4. Debit Card<\/p>\n
A debit card is a piece of plastic that looks just like a credit card. But instead of paying for things with money, you pay for them with a debit card. When you swipe your debit card at a store, the amount of money you owe comes right off your checking account.<\/p>\n
5. Savings Account<\/p>\n
Savings accounts are similar to checking accounts except they do not let you write checks. Instead, you get interest for keeping your money in a savings account.<\/p>\n
6. Online Banking<\/p>\n
Online banking is a way to check your bank balance, transfer money between banks, and make payments online. Banks often offer free online services.<\/p>\n
7. Business Banking<\/p>\n
Business banking is a type of banking that helps businesses manage their finances. A business banker works with companies to help them set up budgets, file taxes, and find loans.<\/p>\n","protected":false},"excerpt":{"rendered":"
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