Certified Financial Institutions & Banking Services Expert

What is financial institutions in banking?

A financial institution (FI) is a company engaged in the business of dealing with financial and monetary transactions such as deposits, loans, investments, and currency exchange.

What is Banking and their key services

Banks are financial institutions that perform deposit and lending functions. There are various types of banks in India and each is responsible to perform different functions.

At its most basic level, a bank is a place to safely keep your money. But beyond the basics, banks usually offer a wide range of products and services designed to make managing your money a bit easier.

From car loans to credit cards, there are plenty of banking services you may need at different stages of life. And with digital options, you can access many of them right from your phone or laptop. Below is a review of financial topics that may help you learn banking basics. There’s also a glossary of terms at the end.

The products and services Banks offer are

Checking Accounts

An account at a financial institution that allows for withdrawals and deposits. Great for paying bills and keeping track of spending.

Savings Accounts

A deposit account held at a bank or other financial institution that safeguards funds and provides a modest interest rate. Great for building emergency savings or saving for short or medium term goal.

Money Market Accounts

Low transaction checking accounts that offer a higher interest rate in exchange for a higher minimum balance requirement. Can be good for building emergency savings or paying for occasional expenses.

Certificates of Deposit

Savings accounts that offer a higher interest rate in exchange for committing your money for a set period of time (six months, 12 months, etc.).

Mortgages

Loans to purchase a home where the collateral is the home itself.

Home Equity Loans

Loans offered to homeowners where the loan amount is capped at a percentage of the equity that the owner has on the home.

Auto Loans

Loans used to finance the purchase of an automobile. It is usually unsecured and based on the borrower’s integrity and ability to pay. The collateral is the vehicle.

Personal Loans

Unsecured loans offered to bank customers.

Credit Cards

Unsecured, revolving loans that comes with a card and is primarily used for purchases, though some also provide cash advances. The credit card issuer sets a maximum limit that can be charged. Borrowers make monthly payments on the amount charged to the account, as well as on the interest that is charged by the issuer. When payments are made, those funds become available for borrowing again.

Debit Cards

Cards issued in association with checking or savings accounts that allow point-of-sale purchases that are then deducted from bank balances and ATM withdrawals.

ATM Cards

Cards issued in association with checking or savings accounts that allow cash deposits and withdrawals at Automatic Teller Machines (ATM) but not point-of sale purchases.

Cashier’s Checks

Checks written by banks that verify that the bank customer has sufficient funds to cover the check. These checks are guaranteed by the bank or credit union. A cashier’s check may be required for closing costs in a home purchase, for example.

Money Orders

Documents written against other accounts or bought with cash, which provide a receipt and are converted to cash by the recipient. Often used to pay bills when someone does not have a checking account.

Traveler’s Checks

Checks written against an account or bought with cash that are made valid when completed with the payee’s name and signed by the owner. Less commonly used now.

Wire Transfers

A way to move money from one person to another. Often used to send money internationally.

Foreign Currency Exchange

Converting one country’s currency to another’s.

Safe Deposit Boxes

A box located at a bank for use for personal possessions that can only be accessed with the assistance of bank personnel by lock and key.

In this Course Certified Financial Institutions & Banking Services Expert, learn

1. Types of Financial Institutions

2. Banking Services Introduction

3. How Banks makes money

4. Banking Career paths