Bahaa Abdul Hussein is a Fintech expert and shares his experiences with his audience through his blogs.
It’s a question that’s been asked a lot lately, especially in light of the recent economic recession. With so many people losing their homes and their jobs, it’s no wonder that people are wondering why traditional banks are still around.
The simple answer is that traditional banks are still around because they’re the safest and most secure way to keep your money. Sure, there are other options out there. Like, online banking or investing in stocks, but when it comes down to it, nothing is more secure than a traditional bank.
There are a few reasons for this. First of all, traditional banks are backed by the government. If something happens to the bank as it goes out of business, the government will step in and help cover any losses.
Another reason traditional banks are so secure is that they have a lot of experience. They’ve been around for a long time and know what they’re doing. They’re also regulated by the government, meaning they have to follow certain rules and guidelines.
Finally, traditional banks are insured. This means that if something happens to the bank, ilke it goes out of business, the insurance will pay out. This is a great safety net for people who have their money in the bank.
How do traditional banks work?
Banking works by matching borrowers and lenders. When you take out a loan, the bank essentially lends you money it has on deposit from other customers. Similarly, when you deposit money in a savings account, the bank essentially lends that money to other customers. The interest rate that you earn on your deposits (or pay on your loans) is how the bank makes money.
How are banks regulated?
Different government agencies regulate commercial banks and investment banks.
The federal government typically regulates commercial banks. The main regulator for commercial banks is the Federal Reserve System. The FDIC also provides deposit insurance for commercial banks.
Investment banks are typically regulated by the Securities and Exchange Commission (SEC).
What to look for when choosing a traditional bank
There are a few things to keep in mind when choosing a traditional bank. First, consider the fees. Some banks charge monthly maintenance fees, ATM fees, or other charges. Make sure you understand all the fees before you open an account.
Also, consider the interest rates. Some banks offer higher interest rates on savings accounts and CDs, while others offer lower rates on loans. Know what’s important to you and compare rates before you choose a bank. Finally, consider the convenience. Some banks have more branches and ATMs than others. If you need to be able to access your money in person, make sure the bank you choose has a branch near you.
Thank you for your interest in Bahaa Abdul Hussein blogs. For more stories, please stay tuned to www.bahaaabdulhussein.com
