No news from the assistant bank manager...
I think the email I sent her was too long, detailed, and daunting.
Since sending her that email, I found two answers to my questions in the Federal Reserve Bank of Boston kid's document, "Basics in Banking."
In response to my question, "What are the various kinds of accounts a customer can get?" I learned that banks typically offer:
-Savings accounts, which allow one to collect a little interest
-Checking accounts, which allow one to write checks without earning interest
-NOW (Negotiable Order of Withdrawal) accounts, which enable one to write checks and collect interest. NOW accounts usually require a minimum balance.
-Money market deposit accounts, which pay a higher rate of interest, allow one to write checks, and require a higher minimum balance of about $2,500
-CD’s (Certificates of Deposit), which are savings deposits that bring in a still higher rate of interest. The customer agrees to leave the money in the CD for a certain amount of time, say a year.
-Individual retirement accounts, which are savings accounts kept in the bank until one reaches a certain age, I think 65.
In response to my question, "What info does the bank need from a customer if he/she is applying for a loan? " I learned that, in addition to collecting information about job and salary, the bank usually does a credit report on the customer. A credit report records how well the customer has been at paying his/her bills. The credit report is compiled by credit bureaus, which are private companies.
I learned from “Banking Basics” that if the bank gives a customer a loan, say for a car, the bank will write the check to the car dealer, and will then hold the legal title for the car, until the customer pays off the loan.
Finally, during my ongoing research on the Federal Reserve, I learned the answer to my question about the current fractional reserve amount. The fractional reserve amount, which has not changed since 1992, is 10%. This means that the bank can legally lend out 90% of its deposits and other assets, while 10% of its money and other assets must be on hand, available in case customers want to withdraw money.
I think the email I sent her was too long, detailed, and daunting.
Since sending her that email, I found two answers to my questions in the Federal Reserve Bank of Boston kid's document, "Basics in Banking."
In response to my question, "What are the various kinds of accounts a customer can get?" I learned that banks typically offer:
-Savings accounts, which allow one to collect a little interest
-Checking accounts, which allow one to write checks without earning interest
-NOW (Negotiable Order of Withdrawal) accounts, which enable one to write checks and collect interest. NOW accounts usually require a minimum balance.
-Money market deposit accounts, which pay a higher rate of interest, allow one to write checks, and require a higher minimum balance of about $2,500
-CD’s (Certificates of Deposit), which are savings deposits that bring in a still higher rate of interest. The customer agrees to leave the money in the CD for a certain amount of time, say a year.
-Individual retirement accounts, which are savings accounts kept in the bank until one reaches a certain age, I think 65.
In response to my question, "What info does the bank need from a customer if he/she is applying for a loan? " I learned that, in addition to collecting information about job and salary, the bank usually does a credit report on the customer. A credit report records how well the customer has been at paying his/her bills. The credit report is compiled by credit bureaus, which are private companies.
I learned from “Banking Basics” that if the bank gives a customer a loan, say for a car, the bank will write the check to the car dealer, and will then hold the legal title for the car, until the customer pays off the loan.
Finally, during my ongoing research on the Federal Reserve, I learned the answer to my question about the current fractional reserve amount. The fractional reserve amount, which has not changed since 1992, is 10%. This means that the bank can legally lend out 90% of its deposits and other assets, while 10% of its money and other assets must be on hand, available in case customers want to withdraw money.
posted by oat collective at 3:14 PM
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