How banks work

A bank!What is a bank?Well banks have been around for around about thousands of years.Banks are much different than piggy banks because there are much more steps than just chucking coins into pigs.You must ask yourself how do banks work?Well we know they store our money but what else do they do?

So in banks the first step is to open up a bank account and deposit some money into it.Then the bank might give money $10.00 to someone but they promise to pay 0.7 extra of what they took and the bank gets 0.5 of it and you yourself get 0.2 of it.This is called interest.Interest is something that you can earn and you might have to pay the interest back to the bank that you borrowed the money from.

You might wanna know what else does a bank do?Well there is something called borrowing and lending money.This is something that most clients do with their money they  borrow the money and lend it back.They work with tens of billions of dollars so this is not a surprise.Banks are very strict on their rules because they wouldn’t want they’re clients money flying everywhere but if you get approved for a loan that means they are letting you borrow their money but you must lend it back to them.

The last thing that banks do is that it is a win win situation for the bank and you because they earn more money and so do you.Banks use a physical ATM that help you deposit your money into your account.They can be seen in BNZ,ANZ,Westpac and much more.Banks have to pay the money that they gave to someone else back to you so you don’t lose any money although you earn heaps of interest.Your money is safe in a safe that can only be accessed by you and the bank

Banks overall are a safe place for your money and it is much more than just keeping your money somewhere safe. It is about much more than that.Banks are very complicated and hopefully you know how they work.You should open a bank account because there are lots of good stuff that comes from it.