Banking

Money and Banking Definitions


Banking is a hugely important sector in any economy. 
Without banks, people would not have security of wealth and would find it impossible to borrow the money they need to buy things such as cars and homes, holidays and further education. This video looks at some of the key areas related to banking.

Functions of commercial bank:

-Current account
-Deposit account
-Payment services
-Loans
-ATM
-Night safes
-24hr banking service
-Foreign currency  
  exchange

Current Account:
This is for day-to-day expenses. There is no interest earned on savings and there is usually a charge for transactions.


Savings Account:
This is for saving your money. This type of account earns interest upon which Deposit Interest Retention Tax (DIRT) is charged


Cheque
A cheque is an instruction to a bank to pay a certain amount of money to a certain person.
Drawer-person who signs cheque
Drawee-drawers bank
Payee-person who the cheque is payable to

Stale Cheque-has not been lodged within 6 months of the date written on it
Post-dated cheque-has a future date on it, cannot be lodged until that date.
A great presentation on Money and Banking

How to use an ATM

The Automatic Teller Machine

This video shows you how to use an Automatic Teller Machine (ATM). ATM's provide people with a convenient way to withdraw their cash from their bank account at a time suitable to them. The best thing about an ATM is that bank customers can take their money out even when the bank is closed. Another great benefit of ATM's is that people can withdraw money from many ATM's around the world. This has led to a much reduced use of Travellers Cheques.

Bank Reconciliation Statement

By the time your bank statement arrives in the post, it is most likely already out of date. Likewise, your own record of what your bank account is often incorrect because you may not have been aware of some payments such as bank fee's or lodgements such as direct debit refunds.
This is why preparing a bank reconciliation statement is important and relevant. Preparing a bank reconciliation statement allows you to see the most up-to-date balance of your bank account.

Bank Reconciliation Statement

Take the online Money and Banking Quiz

Click HERE to take the online Money & Banking Quiz
(Use the settings on the top right of the quiz page to keep testing yourself)