Understanding things that are at a bank or what is used to do banking is a very important part of learning how to save. This section explains some of the words people use about banking. It's never too early to know that being smart about money and saving is an important part of life.

What is banking?

Banking is a business which provides financial services for profit. Traditional banking services include receiving deposits of money, lending money and processing transactions. Some banks (called Banks of issue) issue banknotes as legal tender .

Investment banking is a field of banking that aids companies in acquiring funds. In addition to the acquisition of new funds, investment banking also offers advice for a wide range of transactions a company might engage in.

In commercial banking , the institution collects deposits from clients and gives direct loans to businesses and individuals.

Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by the bank.

The first modern bank was founded in Italy in Genoa in 1406; its name was Banco di San Giorgio (Bank of St. George).

World Bank Group is a group of five international organizations. The World Bank Group gives advice and finance to member countries for economic development and reducing poverty. It is a non-profit-making international organization owned by member governments. The Group has its headquarters Washington, D.C.. It also has offices in 124 other member countries.

The origin of banking

Banking originated in Ancient Mesopotamia where the royal palaces and temples provided secure places for the safe-keeping of grain and other commodities. Receipts came to be used for transfers not only to the original depositors but also to third parties. Eventually private houses in Mesopotamia also got involved in these banking operations and laws regulating them were included in the code of Hammurabi.

In Egypt, the centralization of harvests in state warehouses also led to the development of a system of banking. Written orders for the withdrawal of separate lots of grain by owners whose crops had been deposited there for safety and Convenience, or which had been compulsorily deposited to the credit of the king, soon became used as a more general method of payment of debts to other persons including tax gatherers, priests and traders.

MONEY is something that lets us buy things we want. It is made up of coins and notes. You might get money from your parents or grandparents as a gift for your birthday or other special occasions, for doing jobs around the house, or by selling things you don’t want anymore.

A BANK is a place that looks after people’s money for them and keeps it safe. It also lends money to people to help them buy things like houses.

A BUDGET is a plan on how you will spend the money you earn. It includes how much money you earn (and from where you earn it) and details what you want to spend your money on and how much you will save.

Thats all folks, watch out for more tips.