Banking in the 21st century means being able to conduct all transactions digitally without needing to physically visit a branch location. Deposits, withdrawals, payments, and transfers can be conducted online or by phone app as well as applications for credit cards and loans.

Frequently Asked Questions
  • How does banking work?

    Banks are a very important part of the economy because they provide vital services for both consumers and businesses. Banks provide a secure way to store, protect and provide access to customer deposits. Consumers can conduct routine banking transactions through checking accounts, ATMs and electronic transfers while earning interest on their deposits held in deposit accounts like savings, certificates of deposits and in certain demand deposit accounts.

  • What is the history of deposit insurance?

    The federal government began offering insurance on bank deposits in March 1933 through the creation of the Federal Deposit Insurance Corporation (FDIC) after more than 9,000 banks failed as a result of the great depression. The FDIC is an independent agency that was created to boost confidence in the health and well-being of the national financial system and currently offers $250,000 of coverage per customer, per account.

  • Are big banks a safer option for deposits?

    Larger banks can provide relatively more financial stability compared to smaller financial institutions like state and community banks and other financial institutions. While the U.S. banking system is very strong, including at the state and community level, larger banks are usually nationally chartered commercial banks that are guaranteed to provide FDIC insurance on deposits and are less likely to default on their obligations due to federally mandated capital reserve requirements.

  • What is a national bank?

    A national bank is a commercial bank that is chartered by the U.S. Comptroller of the Currency and functions as a member bank of the Federal Reserve, as well as being an investing member of its district Federal Reserve Bank. National banks are required to be members of the Federal Deposit Insurance Corporation (FDIC) and provide deposit insurance coverage to their customers.

  • What are bank fees?

    Bank fees are charges levied by banks and other financial institutions on their personal and business customers for things like account set-up, maintenance, and transactional services. Other examples of bank fees are wire transfer fees, automated teller machine (ATM) fees, non-sufficient fund (NSF) fees, and late payment charges.

Key Terms
People wait inside the Signature Bank branch in New York City on March 13, 2023. Signature Bank, a $110 billion commercial bank with offices in California, Connecticut, Nevada, New York, and North Carolina, was closed by regulators on March 12, 2023. Customers alarmed by the failure of Silicon Valley Bank yanked their funds.
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SANTA CLARA, CALIFORNIA - MARCH 10: Employees stand outside of the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. Silicon Valley Bank was shut down on Friday morning by California regulators and was put in control of the U.S. Federal Deposit Insurance Corporation. Prior to being shut down by regulators, shares of SVB were halted Friday morning after falling more than 60% in premarket trading following a 60% declined on Thursday when the bank sold off a portfolio of US Treasuries and $1.75 billion in shares to cover declining customer deposits.
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