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Banks and Simple Interest

Bank and Types of Bank Account

Money plays a very important role in our lives, as it helps us to fulfil our daily requirements such as buying food products, shopping, travelling, paying bills, etc. That is why we need to earn and save money.

During our childhood, we save small amounts in piggy banks to buy our favourite toy, dress or anything else. Similarly, money needs to be saved for bigger or urgent future requirements such as buying a house or a car, medical treatment, marriage, etc. Also, this money should be kept at a place which is safe and secure. For this purpose, there are banks. A bank is a place where people take care of the money given by us. We can take out (withdraw) the required amount from the money kept by us with the bank any time.

The interesting thing is that banks pay us for keeping money with them.

Do you know why?

A large number of people keep (deposit) their money in a bank, which results in a huge amount kept with the bank. Here, the bank makes a smart move. It invests the money in different areas and earns profit. From this profit, it …

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