Meaning and Types of Banks and Savings

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Banks and savings

Money is anything that a majority of people can agree on as a means of exchange. Before coins or paper money, people exchanged fish for stone tools or leather goods for wood. This method is called trade by barter.

A bank is where people put their money for safe keeping. In order to keep money in a bank, we must first open a bank account. It is a place where various transaction takes place.

Banking is the process of using a bank for transaction.

Types of bank

There are different types of bank. All these banks provide specific services.

1. Central Bank: This is the apex bank in the country. It is where government keeps all the money it makes and also pays out money. The Central Bank controls the activities of commercial banks.
2. Commercial Bank: They are the most popular types of banks where people can carry out different kind of banking transactions especially for borrowing and transferring money. Examples are Zenith Bank, Union Bank, First Bank of Nigeria, Access bank, etc.
3. Development Bank: These are banks which focus on development within a community, state, or country. Examples are the African Development Bank and the World Bank.
4. Merchant Bank: These banks offer financial services and advice, mainly to companies and wealthy people on how to invest their money.
5. Community Bank: Community bank are usually owned and managed by a community or a group of communities. These banks are to provide loans to people who live in rural areas where there are no or few commercial banks.
6. People’s Bank

 

Saving means keeping or storing up money for use in the future

Different ways to save money

1. Banks
2. Cooperative societies
3. Finance houses
4. Direct investment etc.

 

Importance of saving money

1. To meet future needs
2. To protect our money and valuables from being stolen.
3. To generate interest from the bank
4. To help others in needs etc.
5. To sustain our lifestyle.

 

Behaviour that promote saving money:

• Discipline
• Self-control
• Modesty
• Moderation

 

 

 

 

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