
5 mobile bank apps that help you save money
These five banking apps can help you save money even on a tight budget.
A commercial bank is a financial entity you should be familiar with. Here’s an explanation.
A commercial bank is a for-profit financial institution that accepts deposits, offers loans and provides other financial services to its customers. Commercial banks help fulfill the medium- and short-term financial requirements of businesses. They do not provide long-term credit since they need to maintain the liquidity of their assets.
A commercial bank’s funds belong to the public, which can withdraw funds on short notice. Because of that, commercial banks extend credit for shorter terms with the backing of securities that are tangible and easily marketable.
Before it grants a loan to a business, a commercial bank assesses the business’ ability to repay by looking at factors such as the type of business it is, and its profitability and size.
Commercial banks fall into three main types: public sector banks, private sector banks and foreign banks.
One of the basic functions of a commercial bank is to accept deposits. Deposits fall into various categories depending on their terms and requirements. For instance, there are demand deposits, or current account deposits, usually repayable by the bank on demand. Businesses maintain these accounts for making transactions. These accounts do not accrue interest and are subject to service charges by the bank.
Fixed deposits, on the other hand, are deposited in a bank for a specific amount of time. These deposits accrue interest, but are not used for writing checks or making other regular withdrawal transactions.
Finally, savings deposits combine the features of a fixed deposit and a current account. Depositors can withdraw cash from these accounts, but banks may impose restrictions on the amount and number of withdrawals. Additionally, they accrue less interest than fixed deposits.
Commercial banks do not let deposits remain idle. They use their cash reserves to give loans. They offer different types of loans based on the needs and abilities of their customers to repay. One of these is a cash credit loan, which a bank gives to a borrower against his stocks, bonds or other assets. The bank sets a credit limit on the loan, and the borrower can make withdrawals within the credit limit. The bank charges interest on the amount withdrawn.
These five banking apps can help you save money even on a tight budget.
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