Task 2. Reading
Commercial banks
A bank is a business. A bank doesn’t have a product. It sells many different
kinds of services, all involving money in one way to another. And a bank makes a
profit, too, on the services it provides.
A
commercial
bank
is a bank that provides a wide range of banking
services. As a matter of fact, it is often called a
full-service
bank
.
As its name
suggests, a commercial bank is a business, and in many ways starting a bank is like
starting a corporation. People decide that a bank is needed in a particular area and
then apply for a charter. The charter can be granted by either the state or the federal
government. If the charter comes from the federal government, the bank is a
national bank. It must have the word
national
in its name. Banks whose charters
come from state governments, however, need not contain the word
state
in their
names.
The most obvious services such a bank provides are savings and checking
accounts. One of the primary services of a bank is the acceptance of deposit,
or sums of
money placed in accounts. The bank then is the keeper or guardian of the people's
money.
There are two kinds of deposits. One is the kind you put into a checking
account. A checking account deposit is called a
demand deposit
because you can get
the money in your account right away, on demand. In fact, it is almost like having
currency. But instead of your carrying all of it around, a financial institution keeps
your money and pays it out as directed. You deposit money in the account and then
write checks, or demands, against the deposited money. Later the bank subtracts the
amounts written on the checks from your account when the checks are presented to
the bank for payment.
A deposit that is left with a bank for a fairly long time is called a
time deposit
.
This is the second major kind of deposit, and it is typical of a savings account.
Still another reason why it is called a time deposit is that it may not be given right
away or on demand. When you take money out of an account, you are making
