The bank is legally a financial institution governed by the Monetary and Financial Code. Its main function is to offer financial services such as collecting savings, receiving money deposits, granting loans, managing the means of payment. Savings are the part of the income of a household or business that, during a given period, is not allocated to consumption. It is usually entrusted to a financial institution that pays it (by an interest rate). Savings can take several forms.
Different types of banks
Commercial banks are also called retail banks. This is the type of bank with which the general public is most familiar. Commercial banks are the banks in which we all have our bank accounts and our savings accounts.
Business banks are involved in business finance. They support large businesses by offering various banking services such as strategic and financial advice. These investment banks also support companies on M&A projects.
Investment banks have an activity based on financial markets. These investment banks buy and sell shares, bonds or derivatives on the financial markets.
What are the different forms of savings?
Solidarity saving allows individuals to give their investments solidarity, ethical dimension. By placing its money, the solidarity saver supports projects of high social or environmental utility. These can promote access to employment and housing for people in difficulty, or ecological activities, or entrepreneurship in developing countries.
Collective savings consisted of two categories: employee savings (PEE, PERCO, PEI, CET, etc.) and retirement savings (Articles 83 or defined contributions, Articles 39 or defined benefits). This was a way for wage earners and TNSs to build up savings through their company.
The main objective of many savers is to improve their income when they retire. The difficulties of financing pensions by the State are a growing problem, so we can only encourage you to start this type of savings as soon as possible. Indeed, the earlier you start, the less effort will be required.
To illustrate this, let’s take the example of a saver wishing to retire with a capital of 300 0 00 €. If you consider an average annual interest of 6% (which is the average return available on long-term diversified investments), you will need to save each month:
- €1,831 over 10 years
- €649 over 20 years
- And only €299 over 30 years
That’s why, even though retirement may seem far away when you’re young, you need to start saving and investing as early as possible, even in small amounts.
The different types of bank accounts
Current bank account
Press everyone has a bank account from the time of majority, or even long before. This type of bank account is simply essential in everyday life to receive a salary or pension, keep your money and then make expenditures, transfers or set up levies. It is usually accompanied by at least one credit card, even if it is possible to have a bank account without a card and a chequebook. A current account can also be called a “chequing account” or a “deposit account.”
The term account is also one of the types of bank accounts that grow your savings. Unlike the simple savings account, however, the money deposited into the account is locked in for the duration of the contract, often several years. The interest is that the longer the money stays in the account, the higher the rate. There are even some types of term bank accounts where the rate is progressive. That is to say, and it increases as time goes by. Even if the money is normally locked in, the client can still get it back if he wants to. However, a penalty will generally be imposed.
The undivided account
In contrast to the joint account, the undivided account is much less flexible in its daily operation. To carry out the slightest operation as a simple withdrawal, it is necessary to have the signature of all the co-holders. In fact, this type of bank account is usually used following the transformation of a joint account or settling an estate.
This issue of savings and credit is still important in traditional banks. These offers are not well argued in online banks since they do not have the means to materialize the demand. In fact, the former banks work with the state and the region where they sit, and they know the needs of their people with the economic capacity that specializes them. What dictates that the traditional banks are closer to the people is also why they are treated personally in their former banks.
Since traditional banks are old, they generally benefit from the trust of their customers, even if satisfaction is not always there. The amounts deposited on bank accounts are guaranteed to the tune of €100 0 00, the presence of an advisor, the proximity of an agency, the seniority of the banking institution, etc. each of these benefits reassures the customer of the traditional bank.
Online banking service is access to banking services from an interactive interface, such as a web browser. Depending on the time, it can be accessed by Minitel, by telephone, from an ATM, by computer or through a personal assistant with the Internet.
- Firstly, attractive promotional offers for prospects and customers. An important time saving for the customer who instructs himself the data on the internet and the transactions.
- Also, the websites of online banks generally present the banking offer only.
- Pure players improve web and mobile accessibility, among other things, with innovative applications.