bank2 [bangk]–noun
1. an institution for receiving, lending, exchanging, and safeguarding money and, in some cases, issuing notes and transacting other financial business.
A bank is a financial intermediary used by the majority of Americans, and the world, to hold and protect their money. Banking in the United States is generally synonymous with retail banking, which refers to institutions that deal with customers directly. Examples of retail banks are Chase, Bank of America, and Wachovia.
Most retail banking institutions offer the same generic services:
The Banking Act of 1933, also known as the Glass-Steagall Act, established a staple of the banking industry that is still prevalent today - the Federal Deposit Insurance Corporation. The FDIC insures the safety of deposits made to banks that are members of the corporation. Since 1980, the FDIC had insured $100,000 per depositor per institution, which encompasses checking and savings accounts. In 2008, the insurance limit was raised to $250,000 per depositor to ease the public's fear of the banking industry crumbling around them.
Banks are incapable of going bankrupt in America; they would be taken over by the government and would eventually be sold to a stronger banking institution. The only downside of bank failure is the incapability of choosing where your account will be held next. Many people hold accounts at different banks to maximize on the insurance capabilities; each depositor is insured for up to $250,000 at each individual bank, meaning you can easily have a million dollars federally insured if spread across four different banks. Every banking institution is not FDIC-insured, though.
A bank is a financial intermediary used by the majority of Americans, and the world, to hold and protect their money. Banking in the United States is generally synonymous with retail banking, which refers to institutions that deal with customers directly. Examples of retail banks are Chase, Bank of America, and Wachovia.
Most retail banking institutions offer the same generic services:
- Personal checking and savings accounts
- Business checking accounts
- Credit cards
- Certificates of deposit (CDs) - Accounts that accrue interest over an allotted period of time; can be liquid, meaning accessible and able to be withdrawn, or can be fixed, meaning the only way to withdraw is to pay a penalty charge
- Loans (personal, auto, mortgage, home equity, business, student, boat)
- Individual Retirement Accounts (IRAs)
The Banking Act of 1933, also known as the Glass-Steagall Act, established a staple of the banking industry that is still prevalent today - the Federal Deposit Insurance Corporation. The FDIC insures the safety of deposits made to banks that are members of the corporation. Since 1980, the FDIC had insured $100,000 per depositor per institution, which encompasses checking and savings accounts. In 2008, the insurance limit was raised to $250,000 per depositor to ease the public's fear of the banking industry crumbling around them.Banks are incapable of going bankrupt in America; they would be taken over by the government and would eventually be sold to a stronger banking institution. The only downside of bank failure is the incapability of choosing where your account will be held next. Many people hold accounts at different banks to maximize on the insurance capabilities; each depositor is insured for up to $250,000 at each individual bank, meaning you can easily have a million dollars federally insured if spread across four different banks. Every banking institution is not FDIC-insured, though.
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