Where else does one need to store their finances if not in a bank? Banks are seen as the safest place to store money. Banks can be described as financial institutions where deposits of funds from the public are accepted, withdrawal of funds is done, and also where people get access to credit. Money saving can also be done at the banks. Savings are funds left after expenditure and placed aside for future use. Sometimes when deposited in financial institutions they tend to earn interest. There are different financial institutions in different countries with different financial policies to offer different financial services. But should you really put your money in a bank?

Here are some reasons why you should put your money in the bank.

1) Depositors earn interest

Earning interests is a very good reason to put your money in a bank. Savings in a bank earns an annual percentage interest yield. Different banks will have different percentages of interests depending on how much you save. Banking also protects your money from inflation. Inflation refers to an increase or decrease in monetary value, which can be due to economic instability.

2) Protected by Insurance

To protect is to ensure that something if safe from loss or damage. The Federal Deposit Insurance Corporation offers insurance to depositors in the U.S. through all registered commercial and savings institutions. Different countries have different policies to ensure that your money is kept safe in a bank to avoid losses and insurance policies that cover you during problems that may lead to you losing your funds.

3) Control your transactions

When your bank controls your transactions, it helps keep overspending and misuse of funds in check by putting in place, a limited number of transactions per day and limiting the amount that can be withdrawn. Banks also help depositors plan for their future by setting a limit in savings that should not be withdrawn so as to ensure you have some cash left in your account.

4) Access to loans

Banking enables depositors to borrow funds from the banks in the form of loans. First, you need to determine the type of loan you need, some examples being, mortgage loan, student loan, auto loan or a personal loan. Secondly, check the interest of your bank to understand how much you will be paying back. You can consult with professionals. Then apply for the loan. A financial institution where you save your money understands how much you earn and will provide you a loan according to your income so as to ensure you are able to pay.

5) Ownership of credit or debit cards

Walking around with a card instead of excess cash reduces the chances of you losing your money. Well, this can be done by the help of a prepaid debit card of your bank. It enables you to make purchases, withdraw cash from ATM machines, and pay your bills easily. Some of its features include your name, your account number for identification, and a barcode on the back that enables you to access your funds. It is advantageous because it's secure, convenient, flexible and easy to use. Credit cards, on the other hand, allow you to purchase goods on credit and pay back the money later at an interest.

Different banks offer different saving plans. Some allow you to lock a savings account for six months or more, others allow you to save until you hit a certain amount while others help you create a savings account for a specific project.

The main reasons banks are ideal for savers are the security and convenience they present. Even better, they allow you access to credit which you can use to invest. So, should you put your money in a bank? Yes. It pays off in the long run.


 

Published by Daphenee Plaisir