All of us need to approach a bank at some point in time or the other in our lives. Banks provide us with great loans, credit and debit cards, and even help us to plan a proper budget for our expenditures.
Australia’s financial service sector is the largest contributor to its economy, providing over $140 billion to GDP a year. If you are interested to know some of the most essential banking services, here is a list for you.
1. Providing loans
The most fundamental purpose of a bank is to provide loans to willing customers and generate interest from them as profit. They keep certain cash reserves and from there give loans in the form of short-term, medium-term, or long-term loans to customers.
Sometimes, borrowers are allowed to withdraw more cash than what they have in their bank deposits. This is known as an overdraft. The interest here is charged from customers on the basis of the amount that is overdrawn.
However, it is important to remember that a bank overdraft is not the same as cash credit. In the latter, a person can borrow money from the bank up to a certain limit in the form of a short-term or mid-term loan.
3. Exchange of bills
Discounting bills of exchange is another essential banking service. In this service, anyone who holds a bill of exchange can get it discounted by the bank. In a bill of exchange, the debtor accepts the bills that are drawn upon them by the bill holder.
This amount is then paid on maturity. Some deductions are made in the form of commission from the bank’s end, and the bank pays the bill value to the holder. When this exchange matures, the bank receives the payment from the bill acceptor.
4. Cheque payment
Banks provide cheque pads or notebooks to their customers. These account holders can then use the cheques to write off a specific amount of money and pay that. But a chequebook is issued to a bank’s customer only after a formal verification process.
5. Currency exchange
If you are travelling abroad, you’ll need to have your money exchanged. At a customer’s request, banks exchange the local currencies with foreign ones. This is not just done for travelling or tourism. It is also done for the purposes of settling down dues in the case of foreign trade.
Modern banks don’t just give or take money. They also educate their customers regarding good financial practices and give advice to them. Many experts from different fields of banking are hired to teach others about things like the stock market, income tax, or any other area in which people might need help.
But the drawback is that banks can sometimes disclose the personal information of the customers to the government for consultancy purposes.
7. Bank guarantee
In most commercial banks, customers can appoint a bank as a form of guarantee. When they have to deposit certain sums of money in government institutions, the bank can present itself as a guarantee for the customer instead of the latter depositing funds themselves.
8. Credit cards
One of the most popular bank services is the issuing of credit cards. Using this card, a person can make purchases as much as they want. After every month ends, they will have to pay back that amount to the bank, along with a bit of interest.
9. Debit cards
Debit cards are another great part of banking services. Here, a person who is issued a debit card can directly make purchases from their account. There is no need to pay back anything to the bank.
10. ATM services
ATMs act as human bank tellers by giving cash withdrawals, deposits, or even account inquiries. The biggest advantage of an ATM is that it is available 24 hours a day, charges no labour cost, and is very easy to operate.
If you are looking for a bank that offers you the best financial advice and is very customer-friendly, Great Southern Bank (formerly CUA) is ideal for you. With over 75 years of experience, Great Southern Bank has made a name for itself for being one of the most popular banks people approach.
Over to you…
It’s no doubt that banks are the pillars of any financially stable nation. Without banks and their services, we would all be at a standstill. The ten most essential banking services are easily available for anyone at any time of the day.
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