Empower Your Banking Business with Personal Selling Online for Banking

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foreign now how are you going to keep your hard-earned cash safe you could bury it in the backyard but that seems messy and difficult what if there was somewhere you could keep it safe easily accessible and would actually pay you for storing your money that place is a bank retail Banks offer two fundamental Services they hold money as deposits and they lend money out let's dig into each a bit more deposit accounts offer three main benefits to customers first they are low risk most federal governments provide Deposit Insurance guaranteeing deposited funds up to a certain amount two hundred fifty thousand dollars in the US second they allow customers to access their money adding or withdrawing funds on a regular basis finally they typically pay interest on the deposited funds different types of deposit products differ based on these last two factors banks will pay higher interest for longer commitments with less access to your funds as it allows them to make longer term loans and earn more interest income on the lending side savings accounts provide a simple way to save money for future use they typically pay moderate interest rates and have limits on how many withdrawals can be made each month most savings accounts charge customers a small monthly service fee but often waive the fee if a minimum balance is maintained on the account if you want a higher interest rate and are okay accessing your money less Banks also offer certificates of deposit or CDs these accounts offer a set interest rate over a specific period from a few months up to 10 years however you aren't allowed to access your money during that time without paying a penalty on the other end of the spectrum are checking accounts also called transaction accounts or current accounts which are designed for managing everyday spending these offer little to no interest but also don't have withdrawal limits similar to savings checking accounts typically have monthly service fees that can be waived such as by setting up a recurring direct deposit into the account Banks view checking accounts as the financial anchor for customers once direct deposit and automatic bill payments are set up it's difficult and time consuming for consumers to switch Banks lending products can be split into secured and unsecured Lending secured lending involves some form of collateral which the bank will take ownership of if the borrower can't make their payments or defaults on their debt the collateral is typically the specific asset which the consumer is borrowing money to purchase home mortgages are the largest example of secured lending products these loans are paid back over 15 to 30 years with either fixed or variable interest rates depending on the loan because of the large dollar amounts and the level of risk involved assessing that risk known as underwriting is a manual and highly regulated process for home mortgages auto loans and other secured lending product have a much simpler underwriting process cars are cheaper and easier to repossess and sell than houses as a result auto loans are processed much faster and with lower interest rates than mortgages however all secured lending has lower interest rates for borrowers than unsecured lending in which there is no collateral involved the most common unsecured lending product is credit cards Bank success a consumer's credit worthiness based on their credit score and credit history which looks at things like individual debt and repayment history if approved the consumer receives a credit card and the ability to spend up to a maximum amount if they don't pay off the full balance each month they are charged interest on the remaining amount these interest rates are significantly higher than secured lending rates and Vary based on your individual credit score in addition to the money Banks make from interest payments and monthly service fees they also make money from credit cards through interchange fees that are charged to the merchant whenever you buy something with a credit card the seller pays about one to three percent of the total transaction to the bank that issued the card as an interchange fee in the next chapter we'll look at how Banks actually sell and distribute their deposit and lending products foreign