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BANKS

A system of trading in money which involved safeguarding deposits and making funds available for borrowers, banking developed in the middle Ages in response to the growing need for credit in commerce. The lending functions of banks were undertaken in England by money- lenders. Until their expulsion by Edward I in 1291, the most important money-lenders were Jews. They were replaced by Italian merchants who had papal dispensations to lend money at interest. In the 13th cent. credit was essential to finance commerce and major projects. The most important was the wool trade but other examples included large buildings such as Edward's castles in north Wales. When Italians had their activities in England curtailed in the early 14th cent., they were replaced by English merchants and goldsmiths, whose rates of interest were sufficiently low to avoid the usury laws.

There are several types of banks. Commercial banks are the most common, and include global banks such as Bank of America and Citigroup. Community banks are smaller and focus on local service. Online banks operate over the Internet.

A bank account offers many benefits for you and your money. Here are five reasons you should move your money from a piggy bank to a bank account.

1. It's safe
Your money will be safe from theft and fires. In addition, your money will be federally insured. So, even if your bank or credit union closes, you will get your money back. The maximum amount of money that can be insured is $250,000.

2. It's convenient
Checking accounts offer many benefits. Paying by check is much easier and cheaper than buying a money order (and you'll have proof that you paid your bills). If you get an Automated Teller Machine (ATM) or debit card for the account, you can withdraw money easily or make payments at stores. A debit card is usually accepted for purchases anywhere credit cards are accepted.

3. It's an easy way to save money
Many banks offer a small interest rate when you put your money in a savings account. The interest will help your money grow over time. Depending on the type of account you open, be sure to shop around and check what fees are involved. You don't want to wind up paying more in fees than you are gaining in interest.

4. It's cheaper
Banks and credit unions generally offer their account holders free or low-cost services, such as free check cashing or low-cost money wiring.

5. It can help you access credit
Your chances of obtaining a home, automobile, student or personal loan are likely to improve because banks tend to favor their existing customers. Of course, you need to manage your money well and have a good credit report first.