Banking+as+such+differences+of


 * Banking as such differences of **

There are several different types of bank accounts. Understanding them all can be difficult, as each banking institution may offer a broad range of bank account types. However, most bank accounts fall into one of five categories. By learning the different account categories, you can make deciphering the choices offered at your banking institution much easier. A ** checking account ** is a bank account that uses checks as the primary instrument for withdrawing money. With a checking account, you can make purchases, pay bills, and give or loan money to anyone you choose. You can also use a check to transfer money from your checking account to a bank account at a different financial institution. Usually, financial institutions allow account holders to make as many deposits and withdrawals as they wish. Many allow account holders to make withdrawals and deposits through automatic teller machines (ATM) as well. A ** savings account ** is another type of bank account that allows the holder to make deposits and withdrawals. However, savings accounts are not as flexible as checking accounts. Often, holders of this type of bank account are limited in the number of withdrawals and deposits they can make each month. Also, savings account holders are not able to access their money with checks. Many financial institutions allow savings account holders to make deposits and withdraw funds through ATM, however. Another type of bank account is a ** money market ** **account**. This type of bank account pays interest at a higher rate than the rate paid on interest-bearing savings and checking accounts. Often, money market accounts impose a minimum balance for the account to start earning interest. The minimum required balance on a money market account is usually higher than that imposed on a checking or savings account. With a money market account, withdrawals are limited to six per month. No more than three of these withdrawals can be by check. Time deposits, frequently referred to as **certificates of deposit (CDs)**, are bank accounts that require the account holder to make a deposit and agree to leave funds in the account for a specific amount of time. In return for this agreement, the financial institution pays interest to the account. Often, the interest paid on a CD is higher that the rate paid on other types of bank account. The account holder is required to keep his or her money in the account until the specified term is over. However, some financial institutions allow account holders to withdraw interest, without affecting the principal. In some cases, account holders may be allowed to withdraw their principal funds before their CD matures, but a penalty is typically charged. Some financial institutions also offer basic, **no-frills bank accounts**. A no-frills bank account may allow the holder to pay bills and cash checks without paying the high fees associated with completing such transactions without an account. An account of this type will likely allow for only a limited number of checks, deposits, and withdrawals to be processed in any given month. In most cases, interest is not paid on a no-frills bank account.

A savings account typically refers to an account in which one places money to earn a small amount of interest. Unlike a 401k or an IRA, the savings account funds are usually easily accessible, though some banks do charge for withdrawing money early. In most cases, people can withdraw money from a savings account at any time, at least at any time the bank is open, or one has access to the bank's ATM. The term "bank" is used here loosely. Not only banks, but also credit unions, and money market funds companies can offer a savings account to customers. In addition to earning interest on your deposits, the savings account also provides a safe place to put your money, far better than stowing it in the mattress or the cookie jar. If the bank declares bankruptcy, is the target of embezzlement or mismanagement of funds, the Federal Deposit Insurance Corporation ( FDIC ) insures your account, up to 100,000 US dollars (USD). In fact, a requirement when shopping for a savings account is to look for one that is FDIC insured. If your savings account isn’t FDIC insured, you might have difficulty if the bank encounters financial problems. Most banks, credit unions and money markets funds do offer this insurance. You also need to shop around for a savings account that offers the best interest rates. In the past, it was often the case that banks offered a slightly higher interest rate than did credit unions. This is because credit unions attempt to confer lower interest rates than bank rates to their customers borrowing money. Now sometimes credit unions are quite competitive in rates. Money market funds tend to be the most changeable in rates. Rates earned will depend upon the stock market, so they can be very high at some times and low at others. Many people wonder how a savings account works and is profitable to the bank or other financial institution. The simple explanation is that you are actually lending your money to the financial institution. In return for this loan, the bank offers you part of the interest rate they charge customers. Thus the bank makes a profit and you make a profit on any money in a savings account. Sometimes people might use an interest checking account instead of a savings account. If you really plan not to spend your money for a few months, it makes sense to use a savings account instead. Interest checking accounts pay much less interest than does a savings account, and normally require maintaining a high minimum balance, about 1000 USD. If this balance is not maintained, the checking account may actually charge you bank fees for your use of the account, which nullifies any potential interest earned. Most savings accounts require a minimum deposit, usually 100 USD. An exception exists for children, who often have a savings account as their first bank account. Banks are very accommodating to children who wish to open a savings account because it is a way to build [|its] future base of customers. Usually kids can open a savings account with about 5 USD. The high competition for your temporary loan to banks mean you should shop around prior to choosing a savings account. Some companies will offer terrific incentives. In 2007 Ameritrade began offering a money market savings account, that if kept open for a year would pay a 100 USD bonus at the end of the first year. Money expert Suze Orman, who normally doesn’t endorse specific products, touted this as one of the best offers available to people who want to save their money.

A checking account is a service provided by financial institutions (banks, savings and loans, credit unions, etc.) which allows individuals and businesses to deposit money and withdraw funds from a federally-protected account. The terms of a checking account may vary from bank to bank, but in general a checking account holder can use personal checks in place of cash to pay debts. He or she can also use electronic debit cards or ATM cards to access individual accounts or make cash withdrawals. <span style="font-family: 'Palatino Linotype',serif;">Virtually every bank offers some form of checking account service for their customers. Some may require a minimal initial deposit before establishing a new account, along with proof of identification and address. A student or other low-income applicant may opt for a no-frills checking account which does not charge fees for the use of personal checks and other services. Others may benefit from interest payments by maintaining a high minimum balance each month. Some states are required by law to provide a 'lifeline' checking account option for senior citizens and low-income customers. This type of checking account waives many of the fees banks may charge, such as monthly service fees for low balances and surcharges for ATM usage. <span style="font-family: 'Palatino Linotype',serif;">A typical checking account is handled through careful posting of deposits and withdrawals. The account holder has a supply of official checks which contain all of the essential routing and mailing information. When a check is filled out correctly, the recipient treats it the same as cash and completes the transaction. After this check has been deposited into the recipient's own bank account, a bank worker files the check electronically and the check writer's bank receives the cancelled check and amount to be debited (withdrawn) from the check writer's account. This process continues for every check written against an individual checking account. <span style="font-family: 'Palatino Linotype',serif;">Owners of a checking account are ultimately responsible for keeping track of their available funds, even though the bank will routinely issue its own accounting statements. Checks must represent an actual amount of money contained in the checking account itself. If a check is written for an amount higher than the available balance, the check writer faces numerous fees and possible legal action. The recipient of the bad check can demand immediate cash payment for the original debt as well as a substantial fee for the returned check. Some banks will protect checking account holders by making the proper payments and notifying the check writer that an overdraft has taken place. Most often the bank will recoup their losses through substantial service charges, so it pays to avoid writing checks when the balance is unknown. <span style="font-family: 'Palatino Linotype',serif;">Most banks have several different methods which allow checking account customers to check their balances and reconcile their records. Printed monthly statements of debits and credits (deposits) are mailed to individual account holders. ATM machines offer an option to check the current balance, while online or phone-in accounts can provide real time updates on which checks have been processed and which are still outstanding. This information can be compared with the entries recorded in a journal called a check register. <span style="font-family: 'Palatino Linotype',serif;">As long as the account holder maintains accurate financial records, a checking account provides a safe and efficient way to pay bills and deposit money from payroll checks and other income sources. A savings account may pay more interest over time, but a checking account replaces the need for large amounts of cash to satisfy routine debts such as rent or mortgage payments, credit card bills and utility bills

<span style="font-family: 'Palatino Linotype',serif;">A deposit slip is a printed form which accompanies bank deposits. The depositor fills out the deposit slip to indicate what types of funds are being deposited and which accounts they should be deposited into. In some cases, a bank will pre-print deposit slips with account information and include them in a checkbook. Deposit slips are used by a bank to keep track of the money deposited over the course of a business day, and to ensure that no funds slip through the cracks. For bank clients, a deposit slip offers a form of protection, indicating that funds were counted and accepted by the bank. If the deposit is processed improperly, the deposit slip will provide a paper trail. <span style="font-family: 'Palatino Linotype',serif;">Most people with a checking or savings account have interacted with a deposit slip, and are familiar with the basic format which asks for the name of the client, the date, and the account number. Fields underneath this basic information provide a space for the client to enter the type of funds: cash, coin, or check. If multiple checks are being deposited, the deposit slip usually has a space on the back to list and tally them all. The client adds up the funds to come up with a subtotal, indicates whether or not he or she would like cash back, and then enters a final total of funds being deposited. <span style="font-family: 'Palatino Linotype',serif;">When a client enters a bank with a deposit slip and funds, the bank clerk or teller will count the funds to make sure that the total listed on the deposit slip is correct. The deposit slip is signed, stamped, or printed, depending on the bank, to indicate that it was accepted by a teller, and the teller updates the listed total in the bank account to reflect the deposit. If the funds are in the form of cash and coin, the bank recirculates them. If checks are included in the deposit, the bank sends them on to the issuing bank to be processed. The requested cash back, if any, is also provided. <span style="font-family: 'Palatino Linotype',serif;">A deposit slip can also be used in an Automatic Teller Machine (ATM). In this instance, the deposit slip is filled out and signed by the client before being slipped into an envelope which also contains the funds. The client can use an ATM card to access his or her account and indicate the amount being deposited, and the ATM will print the relevant information onto the envelope after it is inserted into the machine, allowing bank staff to process it in the morning. Banks without ATM machines often have night drops, where people can drop envelopes containing the deposit slip and funds to be handled by a teller in the morning.

One of the banking services that businesses of all sizes may find useful is a lockbox service. Essentially, a lockbox is simply a post office box that your bank establishes for your business and that the bank will control. You are issued a remit to address that will allow your customers to send payment for all invoices issued by your organization directly to the lockbox. In turn, your bank will open all correspondence, deposit the checks into your accounts, and provide you with electronic access that allows you to see daily activity. In short, your bank becomes the means whereby you collect receivables and deposit them into your operating, payroll or other designated business account.

There are several advantages to securing a lockbox for your business. One of the most important is security. Generally, lockboxes are protected above and beyond the usual security measures associated with having a post office box. When a payment reaches your lockbox the chances of it falling into the wrong hands is just about nil. This can give both you and your customer base a sense of comfort.

Second, the lockbox procedure can make it much easier for you to post payments into your accounting system. Many banks are able to provide detail about the deposited payments that includes images of the checks and any other documents that come with the check. Often, a daily batch of receipts can be downloaded as a PDF and used for manual entry into your system. This method saves your accounting team from having to open mail and sort out the checks before entering the data. Also, it eliminates having to prepare a bank deposit.

However, you may be able to save even more time, depending on the type of accounting software you use. Many banks can provide a delimited report that can be imported directly into some accounting software systems. If you are fortunate enough to have compatible software, then the task of posting payments may take a few moments, even if the list of payments reaches into the hundreds.

A third advantage to the lockbox system is that you have a backup history of your Receivables. Should something major happen with your software accounting system and you lose a portion or all of the data, history reports on lockbox activity can help you begin the process of rebuilding. This means you can bring your customer accounts up to date quickly, as well as begin to reconstruct your Income and Expense reporting month by month.

While a lockbox does not perform any function that your accounting team could not do for you, the advantages of time saved, backup information source and enhanced security make a lockbox system a very attractive option. Check with your bank today and see what they have to offer in the way of a lockbox program.

<span style="font-family: 'Palatino Linotype',serif;">When you deposit a check into a bank, a waiting period is usually assessed. This waiting period, sometimes called a //clearing period//, is the length of time the bank will hold checks in order to assess whether or not the funds are available. There are also a few other reasons why a bank may hold checks before making the cash available. <span style="font-family: 'Palatino Linotype',serif;">A few different factors influence the waiting time for a check deposited into your account. Where the check comes from is one such factor. Checks are classified by the bank as either local or non local. Banks hold checks for specific periods of time based on this designation. <span style="font-family: 'Palatino Linotype',serif;">Checks are designated as local when they are deposited within a bank’s geographical region. This specified region can include many different areas within the state where the bank is located. Banks are allowed to hold checks that are locally deposited for one day. After a local check has been deposited, the funds should be available by the morning of the second business day. The bank should not hold checks that are local for longer than one day. <span style="font-family: 'Palatino Linotype',serif;">Non local checks are deposited outside of the bank's specified region. These checks take longer to process. After a non local check has been deposited, the funds should be available by the morning of the fifth business day. <span style="font-family: 'Palatino Linotype',serif;">If you think that your bank is taking longer than expected to clear a check, ask for the bank’s availability schedule. This will explain exactly how long the bank will hold checks before the funds are available. Maximum check holding times are mandated by law. A bank is not allowed to hold checks for longer than the law stipulates. The bank is free to cash checks earlier than the maximum legal time limit. <span style="font-family: 'Palatino Linotype',serif;">Certain types of checks should be available immediately, or at the latest, the day after deposit. Paychecks are usually processed electronically and should be available by the next business day. Money orders from the U.S. Postal Service should also be available by the next day. Checks drawn by the U.S. Treasury and deposited straight into a payee account are also available the following day. There are numerous other government related checks that should also be next day available, and a list of these can be obtained from any bank. <span style="font-family: 'Palatino Linotype',serif;">Also, when assessing how long your bank holds checks, be sure to take into account their business hours. A bank’s business day is measured by its opening hours, and each bank may have its own specified cut-off times. A check deposited at a certain time may be dealt with on the same day in one bank, but at a different bank, it may not be. You should be able to determine a bank’s cut-off time by asking a teller. All of the factors discussed above go into making up how long a bank can hold checks until the cash is placed into your account.

<span style="font-family: 'Palatino Linotype',serif;">The Check Clearing for the 21st Century Act, or Check 21, was an act of American legislature that was passed on October 28, 2003, and took effect a year later. Check 21 changed the way in which payments by check are processed in the United States, and streamlined communication between American banks. Banks which have chosen to use Check 21 process checks much more rapidly, effecting consumers who are in the habit of “floating” when they write checks. <span style="font-family: 'Palatino Linotype',serif;">"Floating" refers to writing a check when there are insufficient funds in the account. Under former check processing practices, this rarely posed a problem, because the funds would appear before the check could be processed. Perhaps someone would write a check knowing that another check was clearing, and that the funds would be deposited in time. Or, a check could be written with the knowledge that a paycheck would be received in several days, and that the paycheck could be cashed and deposited to clear the first check. <span style="font-family: 'Palatino Linotype',serif;">Before Check 21, if person A wrote a check to person B, person B would deposit the check in his or her bank account, and be informed that the check might take several days to clear. Bank B would send the check to Bank A, and Bank A would confirm that the check was valid, and would transfer the funds to Bank B. Several days after person B deposited the check, the funds would be deducted from person A's account, and person B's bank balance would go up. <span style="font-family: 'Palatino Linotype',serif;">Check 21 regulates electronic communications between banks. Now, instead of having to send a physical check to clear it, Bank B can simply send an electronic image. Bank A confirms that the check is valid and instantly transfers the funds. Using Check 21, a bank can clear a check in as little as 24 hours, rather than taking several days to do it. Bank B would keep the actual check, rather than sending it to Bank A. If person A wanted a copy of his or her canceled check, they can request a substitute check from their bank. The substitute check is an authorized electronic copy of the original check. <span style="font-family: 'Palatino Linotype',serif;">Consumers who get their canceled checks back from the bank with each statement can request substitute checks. Requesting substitute checks provides more consumer protections, and makes disputes much easier to resolve. In some cases, a bank account cannot be recredited if the customer does not have a substitute check. If a check clears an account twice, or an unauthorized check is written, the substitute check can be used just like the original to resolve the issue. If you are having a dispute with the bank, make sure to ask for a substitute check, not a copy, because the substitute check is a legal document which comes with unique rights and protections. <span style="font-family: 'Palatino Linotype',serif;">Not all banks transfer images electronically under Check 21, although all of them now create substitute checks. In some cases, a bank will create a paper substitute check and send it to the issuing bank to clear it. The original checks are kept by the bank, where they are deposited for a set period of time and then destroyed. To find out if your bank processes checks electronically or on paper, talk to your bank manager, who can also provide more information about your rights and protections under Check 21.

<span style="font-family: 'Palatino Linotype',serif;">In many cases, when you bounce a check, it gets returned unpaid to the company or person who deposited it. In addition to the fee usually assessed by the recipient of the check, your bank may also assess a service charge to you for having written a bad check. If the overdrawn amount is insignificant and you have a long standing account with a bank, the bank may pay your check, but still assess a fee for payment. If you’re in the habit of bouncing checks, these fees can be as high as 30 US dollars (USD) even if you only overdraw your account by a dollar. In response to the occasional bounced check, some banks offer overdraft protection. <span style="font-family: 'Palatino Linotype',serif;">With overdraft protection, you are still assessed a fee for any bounced checks or ATM transactions exceeding your account balance, and the extent to which you can borrow from your bank may also be set. You might have a 300 USD limit on overdrawing your account. If you exceed this limit, the bank will start bouncing your checks. Fees range from 0 to about 30 USD for a single check which overdraws your account. Standard amounts are usually around 10-15 USD for using overdraft protection services. This can be a fairly high price to pay if you overdraw your account by a few dollars. <span style="font-family: 'Palatino Linotype',serif;">If you don’t replace the overdrawn money, plus the fee, within 30 days you are usually charged interest on overdrawn amounts. Further, if you make a significant banking error and bounce several checks, even for small amounts, you can quickly reach the maximum amount set by your overdraft protection because of the fees. It can become very costly to make use of overdraft protection on a regular basis. <span style="font-family: 'Palatino Linotype',serif;">Some overdraft protection plans do not assess a large fee for overdrafts. Instead if you also have a savings account with a bank, they may, with your permission, merely draw on the savings account if a check exceeds your bank balance. Some banks can still be fairly miserly and assess a fee for this service, still in the range of about 10-15 USD. Others may offer it free of charge, since the bank is not advancing you any money. The money used to cover the check is your own. Other banks assess a small “service fee” of a dollar or two if they must draw on your savings account, because it does involve some extra steps. <span style="font-family: 'Palatino Linotype',serif;">The benefits to providing your own overdraft protection through a savings account are that you don’t owe the bank interest on overdrawn amounts. It can help to find a bank that will offer you this service for free or at a very minimal fee, particularly if you are not good at balancing your checkbook. It is important to keep records of deductions taken from your savings account, because overdraft protection services based on a savings account don’t work if the savings account is out of money. <span style="font-family: 'Palatino Linotype',serif;">Since keeping records proves challenging for many, customers now often look for online banking services instead of overdraft protection; although they may look for both. Usually with online banking, any transactions are immediately recorded, though checks may not show up until cashed by recipients. With checks used less frequently, online banking provides an excellent means to always knowing what your balance is, which can help translate to utilizing overdraft protection less frequently and fewer fees assessed by your bank.

<span style="font-family: 'Palatino Linotype',serif;">If someone needs to pay for something via US Mail and does not want to write a personal check, what does he do? He buys a money order! This method of paying bills is still popular today, and many people prefer a money order to a personal check. <span style="font-family: 'Palatino Linotype',serif;">A money order is an instrument that orders a sum of money to be paid to someone else. The buyer goes to a post office, grocery store or even a convenience store, pays for the order in the amount he wishes, along with a fee to the establishment selling it, and sends the order to the person he wants to pay. Because the money order must be paid for in full at the time of purchase, the payee is guaranteed the money will be paid to him. <span style="font-family: 'Palatino Linotype',serif;">A money order does not expire, so the payee can cash it at any time. Companies such as Western Union guarantee the funds for a money order, so the buyer does not have to buy the money order and then worry about the money coming out of his checking account unexpectedly some time later. The money order is also popular with those who do not have a bank account. They can pay bills via mail and not worry about sending cash or paying to wire cash to an individual. Anyone with cash in hand can purchase a money order, so there are no age requirements, as there may be for opening a bank account. <span style="font-family: 'Palatino Linotype',serif;">The money order system was first formally established in Great Britain in 1792, by a private company. It didn't do very well, and in the mid-1830s the system was taken over by the post office. The trend caught on in the U.S. as a safe way to send money and as a guarantee that the money would be available. <span style="font-family: 'Palatino Linotype',serif;">Cashier's checks from a bank are much the same as a money order, but usually involve larger sums of money. Many stores have limits on how much someone can make a money order for. Cashier's checks usually involve amounts of money over $500 or $1,000. They are guaranteed by the issuing bank. <span style="font-family: 'Palatino Linotype',serif;">A person should always ask how much the store's fee is to purchase a money order and should be ready with that amount of cash in hand

<span style="font-family: 'Palatino Linotype',serif;">A check cashing service may refer to a large or small company that will cash one’s check for a fee. A personal bank also cashes checks, and some do so at no cost to the consumer. With direct deposit, there are now many banks that will quickly cash checks without fees. However, the check cashing service offered by a check cashing company often also doubles as a short-term loan facility, offering money in advance of a paycheck for a percentage of the paycheck. <span style="font-family: 'Palatino Linotype',serif;">The check cashing service, whether through advanced short-term loans or through percentage of checks cashed, makes money on each cashed check. As with a bank, one still needs to provide identification, and the check cashing service may not accept personal checks. Some companies offer direct deposit, where money is loaded onto an ATM card and picked up at a check cashing service store. If one doesn’t make a lot of money, it may cost about the same to cash checks in a month as it would to pay bank fees. <span style="font-family: 'Palatino Linotype',serif;">Usually, however, this is not the case. Fees from check cashing services tend to exceed bank fee amounts. For example, cashing a 1500 US dollar (USD) check might incur a 3-5% fee. That is 45 USD in fees at the lowest percentage. Even a 1% fee would be 15 USD. Conversely, most banks that charge a monthly service fee charge about 10-15 USD per month. Thus one is often losing money when using a check cashing service. <span style="font-family: 'Palatino Linotype',serif;">Advances on paychecks may incur even higher fees, and may result in significant money loss. In fact some get into a vicious cycle of needing money in advance of their paychecks, and losing money each time by getting advances. Such advances may significantly exceed interest one might pay on a credit card. <span style="font-family: 'Palatino Linotype',serif;">However, a check cashing service is convenient, and may provide an opportunity to cash a check immediately. Many observe hours other than those observed by banks, and it might be worth the fee to have immediate access to funds. In this case, the check cashing service does provide assistance, and might occasionally be used without great loss of income. <span style="font-family: 'Palatino Linotype',serif;">Most financial experts, however, suggest seeking a bank that allows direct deposit without fees. Even a small loss of income can add up over time, and thus ultimately prove less beneficial than immediate access to one’s money.

<span style="font-family: 'Palatino Linotype',serif;"> Electronic funds transfers (EFTs) are faster, more efficient, and less expensive than paper check transactions. They are also said to be safer and more secure. Many individuals, however, question whether or not EFT transactions are as safe as they are cracked up to be. <span style="font-family: 'Palatino Linotype',serif;">First, it is important to realize that no payment or collection system is 100% safe. There is always the potential, no matter how small, for things to go wrong. Errors are possible, and foul-ups occur, even with the most advanced technologies in place. That said, many experts assert that EFT offers an extremely high level of security. In fact, EFT transactions are considered to be far safer than dealing with paper checks. <span style="font-family: 'Palatino Linotype',serif;">Each year, an untold number of checks are lost in the mail. This is one risk that is immediately eradicated through the use of EFT transactions. There is nothing to be mailed, and therefore, nothing to lose. EFT transactions also help to reduce the risk of check fraud. <span style="font-family: 'Palatino Linotype',serif;">With an EFT transaction, you are required to reveal sensitive information to the business or organization with which you are making the transaction. This information may include bank account and routing numbers, as well as your home address and phone number. Without question, providing this information to the wrong parties is a recipe for disaster. As long as you limit yourself to providing this information to merchants and organizations you trust, however, your confidential information should be perfectly safe. <span style="font-family: 'Palatino Linotype',serif;">To ensure your safety in EFT transactions, it is wise to take certain precautions. When sending information via the Internet, do so only with websites that offer secure encryption technology. If the company you are dealing with doesn’t offer this level of protection, you would be wise to find another way to make or receive payment. <span style="font-family: 'Palatino Linotype',serif;">Be sure to carefully review your bank statements each month, checking for errors. If you spot errors or suspicious activity, report it to your financial institution right away. Your liability for erroneous transactions may be limited, as long as you report the problem within a reasonable time frame. For example, in the United States, consumers are liable only for the first 50 US Dollars (USD) of a fraudulent EFT transaction, provided that it is reported within two days of receiving a bank statement listing the transfer. <span style="font-family: 'Palatino Linotype',serif;">If you wait to report problems after that two-day period, your liability goes up. Consumer liability is capped at 500 USD for reports made within 60 days of receiving the bank statement. After the 60-day mark, consumers risk losing all the money involved in the fraudulent transfer. <span style="font-family: 'Palatino Linotype',serif;">All in all, EFT transactions are far safer than writing paper checks. When you pay by check, you make it possible for anyone who happens to see your check to obtain your bank account and routing numbers. Often, paper checks pass through many hands on their way to the bank. Anyone who lays eyes on your check has the opportunity to steal your information and use it to obtain money from your account. EFT transactions are encrypted for transmission, decreasing the risk of unlawful interception

<span style="font-family: 'Palatino Linotype',serif;">An international money transfer is a method of sending money from one country [|to] another. It is typically conducted by tourists or students in one country who need money from a friend or relative in another country. With an expanding world of freelance workers, who are contractors that complete work for a business or individual from their homes, international money transfer is also used to pay freelancers who live in a country other than the country where the client resides. This practice is discouraged, however, as an international money transfer is intended to be for personal use. <span style="font-family: 'Palatino Linotype',serif;">Completing an international money transfer is simple, and the money can be in the hands of the recipient within in a matter of minutes. To conduct an international money transfer, the sender must visit a Western Union location. These offices are available in 185 different locations, for a total of over 100,000 locations to select from. <span style="font-family: 'Palatino Linotype',serif;">Once at Western Union, the sender must fill out a “To send money” form. After filling out this form, the sender gives the Western Union employee the amount of money that is to be sent, plus an additional fee for conducting an international money transfer. The sender then receives a Money Transfer Control Number, which is located on the receipt. <span style="font-family: 'Palatino Linotype',serif;">The sender can then call or email the recipient to provide him or her with the number associated with the international money transfer. Care must be taken when emailing the information, however, as the email can be hacked into and the hacker can use the number and attempt to take the money. This task is somewhat difficult, however, as the recipient must complete a “To receive money” form and present proper identification before the money is released. <span style="font-family: 'Palatino Linotype',serif;">The recipient of an international money transfer may pick up the money from another Western Union office. In some countries, however, other pick up points have been designated. The most common alternative pick up points for international money transfer transactions are at post offices. For those individuals who regularly complete international money transfer transactions, some of these pick up points provide special identity cards in order to make the process even faster.

It's easy to forget that banks and other lending institutions actually need to earn money themselves. One way credit card companies and banks make a profit is by charging customers for the privilege of borrowing their money. Any additional fee added to the original amount of a loan can be called a finance charge. This definition of finance charge includes the interest added to the balance, service fees for transactions, late fees, and balance transfer fees. When a customer receives a $1000 USD loan from a bank, for example, the bank has the legal right to charge interest based on the current federal prime lending rate. If this interest rate were a fixed 10%, the eventual 'cost' of borrowing the original $1000 would be at least $1100, the amount of the loan plus a $100 finance charge. But this isn't the end of the finance charge story. Banks and credit card companies also expect a minimal payment to be made by a specified time of the month. Customers may have a few days after that date (called a grace period) to send off their bill, but payments received late can be assessed late fees or another finance charge. The terms of these penalty fees must be spelled out in writing under a federal Truth-in-Lending Act. If a customer can pay off the entire balance due before the grace period ends, no finance charge should be incurred. But most credit card holders have substantial balances remaining on their accounts, which means the bank or credit card company can legally add a percentage of that balance to the total amount owed. Some may feel that banks and other lending institutions exploit the system by creating an impossibly strict finance charge policy. The truth is that all banks and other lenders must periodically report their practices to a federal board which oversees fair lending practices. As long as a bank or lender reports all the potential forms of a finance charge in writing and the borrower agrees to those terms, there is little legal recourse. This is why bank loan officers encourage borrowers to read the terms of the loan contract carefully before signing. A standard finance charge such as interest payments or late fee should be anticipated as the cost of borrowing money. Consumers looking for the best loan arrangements should compare different rates offered at various banks and credit unions to get the best terms possible. Information on interest rates and other standard finance charges should be readily available upon request. || ||

<span style="font-family: 'Palatino Linotype',serif;">Buying on margin involves taking out a partial loan from one's broker in order to cover a larger investment than one's capital could directly cover. A margin call most often occurs when the amount of actual capital the investor has drops below a set percent of the total investment. A margin call may also be triggered if the broker changes their minimum margin requirement —- the absolute minimum percentage of the total investment that one must have in direct equity. Some examples will best demonstrate the two circumstances in which a margin call is likely to occur. <span style="font-family: 'Palatino Linotype',serif;">Let us assume that we go through our broker to purchase $100,000 worth of stocks. We'll say that we borrowed $50,000 from our broker on margin to purchase the stocks, and invested $50,000 of our own capital. After a particularly poor week of performance, the stock we initially invested in is now worth only $75,000. This leaves our equity at $25,000, which we can determine by taking the current value of $75,000 and deducting the loan value of $50,000. If our broker's minimum margin requirement is 30%, we will still be fine, as the minimum margin requirement in our case would be 30% of $75,000, or $22,500. <span style="font-family: 'Palatino Linotype',serif;">If, however, the value of the stock drops again the next day to $60,000, then our equity will be left at a mere $10,000. At this point, our broker will put out a margin call, and we will be forced to raise at least an additional $12,500. We might raise the money to meet the margin call by selling off a portion of the stock we have invested in, by taking out an additional loan from another source, or by replenishing our equity pool with our own assets. <span style="font-family: 'Palatino Linotype',serif;">The second scenario in which a margin call might occur has to do with the brokerage itself, rather than the performance of the market. Let us assume the same situation as before, in which we have purchased $100,000 worth of stocks with $50,000 in equity. The same initial downturn occurs, leaving us with $25,000 in equity on a $75,000 investment. This same brokerage has a minimum margin requirement of 30%, so they have no need to issue a margin call. <span style="font-family: 'Palatino Linotype',serif;">Occasionally, however, because of the swinging market or internal factors, a brokerage may decide to adjust their minimum margin requirements slightly. If our brokerage were to raise their minimum margin requirement to 35%, the minimum equity in our case would be $26,250, so we would be issued a margin call and be forced to raise an additional $1,250. A margin call is not a big deal in the financial world, and it does not reflect poorly on an investor to be subject to one. Margin calls are simply a part of buying on margin, and while some people choose to keep their invested equity well above the minimum margin requirements to avoid a margin call, others keep themselves continuously invested at exactly the minimum, prompting a margin call every time the market takes a downturn

<span style="font-family: 'Palatino Linotype',serif;">Margin buying is a way of spending more money than one actually has on hand on an investment. This is done by putting a smaller investment down as collateral, and then borrowing money from the broker to make up the rest of the cost of the stocks. Margin buying can be an excellent way to make a lot of money off of a relatively smaller amount of initial capital -- but it can also result in some pretty devastating losses. Let us look at an example to see how margin buying can yield great benefits, and also to understand its downsides. <span style="font-family: 'Palatino Linotype',serif;">Imagine we are purchasing a stock for $100, and we are buying it all with our own money. The price of the stock then doubles, leaving our stock worth $200. We have just made a 100% return on our initial investment, and a profit of $100. <span style="font-family: 'Palatino Linotype',serif;">Now imagine we only have $25, so we purchase $100 worth of stock using margin buying, with a $75 loan from our broker. The stock price doubles to $200, so our return is actually 700%, minus the $75 plus interest we owe to our broker. So off of an initial investment of $25, we've made nearly $100, or almost quadrupled our initial investment. So margin buying can be a wonderful shortcut to reaping large returns. <span style="font-family: 'Palatino Linotype',serif;">On the other hand, imagine a similar margin buying scenario. We are buying $100 of stock, all with our own money. The price plummets to half its initial value, closing at only $50. We've now lost 50% of our initial investment -- a harsh blow, to be sure, but still leaving us with some capital to invest. <span style="font-family: 'Palatino Linotype',serif;">Imagine instead that we have only $25, so we purchase the $100 worth of stock using margin buying with a loan from our broker. As the stock price drops below our initial investment, our broker will put out a margin call, requiring us to pay in more to meet the minimum margin requirement. Otherwise they will sell off our securities to cover the loan and we will be left with nothing. <span style="font-family: 'Palatino Linotype',serif;">Even if we pay another $25 to cover the minimum margin, as the stock price drops to $50 we will still be left with nothing. Off of our initial investment we have lost fully 100%, leaving us with nothing. So margin buying can be a dangerous path if the market has a bad day or our stock choices are unlucky. <span style="font-family: 'Palatino Linotype',serif;">Margin buying has changed since the 1920s, when it had relatively loose regulations and minimum margin requirements were very low. This situation led to a lot of weak investment positions, which in turn helped usher in the Crash of 1929 and the Great Depression. Since then, brokers tend to require higher minimum margins in cases of margin buying, asking investors to put up more initial capital to help protect them against fluctuations in the market. The Federal Reserve Board now has a number of rules handling margin buying, and organizations which self-regulate, such as the NASD and NYSE, have their own rules. These include such things as a mandatory minimum margin -- the New York Stock Exchange requires at least a US$2000 deposit with the brokerage and a cap on leverage, limiting you from borrowing more than 50% of the total investment value.

<span style="font-family: 'Palatino Linotype',serif;">A margin loan or a margin account is a loan made by a brokerage house to a client that allows the customer to buy stocks on credit. The term margin itself refers to the difference between the market value of the shares purchased and the amount borrowed from the brokerage. Interest on the margin loan is usually calculated on the outstanding balance on a daily basis and charged to the margin account. As time goes by, the outstanding debt goes up and interest charges accumulate. Also, the brokerage holds the securities as collateral for the loan. <span style="font-family: 'Palatino Linotype',serif;">A simple example of a purchase on margin might be an investor buying stocks with a market value of $10,000 but only using $5,000 of their own money. The other $5,000 would be provided by the brokerage as a margin loan. <span style="font-family: 'Palatino Linotype',serif;">Sounds straightforward, but margin loans aren't simple. <span style="font-family: 'Palatino Linotype',serif;">If you want to trade on margin, the first thing you need to do is open a margin account. By law, this requires an initial investment of at least $2,000. But that amount could be more, depending on the brokerage house 's own rules to open the account. This set up amount is known as the "minimum margin". Once your account is open, you can then borrow up to 50% of the price of any stock you want to purchase. Understand, you don't have to borrow the full 50%; the amount you borrow can be less than 50%. The 50% " down payment " is called your initial margin. As long as stock prices stay stable or go up and you make your interest payments your life will roll along smoothly. <span style="font-family: 'Palatino Linotype',serif;">However, you need to be aware of what is known as "maintenance margin", in case stock prices drop. According to the rules of the New York Stock Exchange (NYSE) anyone who buys stocks on margin must maintain a minimum of 25% of the total market value of the securities that are in the margin account. Some brokerages demand an even higher percentage. <span style="font-family: 'Palatino Linotype',serif;">Falling share prices could take your account below the minimum threshold and the brokerage house will require you to put in more cash or securities to bring your stake up to the minimum. The call from the brokerage demanding these incremental funds is known as a " margin call ". Depending on the terms of the margin loan agreement you originally signed with the brokerage, they even may have the legal right to sell securities out of your account without consulting you, to get the back to the maintenance minimum. <span style="font-family: 'Palatino Linotype',serif;">Undoubtedly, margin accounts allow an investor to gain control of a large block of stock at a minimal investment. Sophisticated investors will use a margin loan to increase their personal wealth by using the "leverage" provided by using borrowed money. <span style="font-family: 'Palatino Linotype',serif;">However, if share prices go the wrong way, the investor with the margin loan, is not only liable for the money borrowed but also maintaining their margin account minimum. Now, leverage is working the other way and the falling share prices combined with the outstanding margin loan can cause an investor significant financial hardship.

When you want to buy an amount of stocks that you can't completely fund, you may be able to borrow the money you need from your broker. This type of loan is called a margin loan. And, like any other loan, it comes with an interest rate. The interest rate that you will be charged for a margin loan is determined by the individual broker, but it's generally based on the broker's call, also known as the broker's call rate, call loan, or call loan rate. This rate is published daily in the Wall Street Journal. While a stock broker may not be t/spanhe first person you think of when deciding where you want to borrow money from, it can be a profitable venture. But like most things, it is not an endeavor without risk. By signing up for a margin account with your stock broker, you can purchase more stock than you can actually pay for by borrowing the money from your broker. The cash and/or stocks you own in the account are used as security for the loan. In fact, in order to be eligible for the loan, broker's usually impose a minimum equity amount which is generally around 35%. That is, the value of the stock you own less the amount you owe must be at least 35% of the total value. The interest rate that the broker charges can be over or under the broker's call rate, generally plus or minus one or two percent but it can be more. The broker's call is a variable rate which means it can fluctuate up and down based on the underlying interest rate index — the prime rate set by the Federal Reserve. A broker's call rate may vary during the life of the loan, or it may remain the same. The loan may be long term or short term. Investors should be careful when engaging in this sort of arrangement. Since the loan is secured by the value of the stocks in your account, if the stocks were to suddenly drop in value, the broker may issue a margin call. That is, the broker may require the investor to provide more money. If the margin investor fails to do this, the stock broker can sell stock from the investor's account until the loan is repaid. This can be bad for the investor as this is usually the worst time for the investor to be selling the stock. Unfortunately, there is no other choice for the investor if the loan cannot be repaid. Herein lies the risk of margin loans. Investors thinking of using margin when investing may be much wiser to get a loan from a traditional bank, although the bank's interest rate will likely be higher than the broker's call rate. This is due in part to the fact that the bank will give you a fixed rate rather than a variable rate as in the case of a broker's call. Investor's should weigh the risks of going with a margin loan versus other loan options, and proceed wisely! || ||

<span style="font-family: 'Palatino Linotype',serif;">A put option is a type of financial instrument known as a //derivative//. It is basically an agreement between parties to exchange ownership of a stock at an agreed upon price within a certain time period. The exchange of the stock is optional and the owner of the put option decides whether it takes place. <span style="font-family: 'Palatino Linotype',serif;">The agreed upon price of the exchange is called the //strike price//. The date on which the put option expires is the //expiry date//. The amount of money required to purchase this put option is called the //premium//. If the exchange takes place, then one is said to have //exercised the put option//. <span style="font-family: 'Palatino Linotype',serif;">Put option premiums are always quoted per stock, but sold in lots of 100 shares minimum. Put options are always an agreement about being able to sell the stock at the agreed upon price. Put options come in both European style and American style. <span style="font-family: 'Palatino Linotype',serif;">European style put options are sold on European exchanges, while American style put options are sold in North American exchanges. The difference is quite simple. European options can only be exercised on the expiry date, while American style options can be exercised at any time during the life of the put option. <span style="font-family: 'Palatino Linotype',serif;">There are two investment styles when investing in put options. Conservative investors purchase a put option on stock that is part of their portfolio as an insurance policy against a large drop in the price of the stock. For example, if a conservative investor owns stock in company XYZ and is concerned that the stock price may decline, but is unwilling to sell the stock in XYZ, a put option can be purchased to insure that if XYZ stock were to dramatically decline in price, the investor would be able to sell the stock at the strike price of the put option. If XYZ stock is selling at 45 US dollars (USD), a put option could be purchased with a strike price of 43 USD. <span style="font-family: 'Palatino Linotype',serif;">At any time during the life of the put option, the owner may sell XYZ stock for 43 USD per share. This would only be done if the price of the XYZ share were to fall below 43 USD. The price of this put option will be dependant upon a number of variables but will be much less then 43 USD, typically in the 1 to 2 USD range. This example assumes an American style put option. Remember also that put options can only be purchased in lots of 100 shares. <span style="font-family: 'Palatino Linotype',serif;">The speculative put option investor either purchases or sells put options without owning the underlying stock. Selling a put option is also called "writing" a put option, and the seller of the put option is said to be [|its] writer. If a speculative investor thinks XZY stock is going to increase in value, then the investor will be a writer or seller of put options. When the stock price of XYZ company increases in value, the put options decrease in value. If a speculative investor thinks XZY stock is going to decrease in value, then the investor will be a buyer of put options. When the stock price of XYZ company decreases in value, the put options increase in value. <span style="font-family: 'Palatino Linotype',serif;">The use of put options allows the speculative investor to dramatically increase the profit earned compared to making purchases in the stock or company itself due to the leverage that is built into the put option. For example, if the investor thinks XYZ stock currently selling for 45 USD per share is likely to decline to 43 USD per share, a put option with a 45 USD strike could be purchased for close to 1 USD. If the price does in fact decline to 43 USD, the put option value will increase in value to 2 USD or possibly even more. However, if the XYZ stock price does not decline as expected, then the investor will lose the entire amount invested.

<span style="font-family: 'Palatino Linotype',serif;">A call option is a type of financial instrument known as a //derivative//. It is basically an agreement between two parties to exchange ownership of a stock at an agreed upon price within a certain time period. The exchange of the stock is optional and the owner of the call option decides whether it takes place. <span style="font-family: 'Palatino Linotype',serif;">The agreed upon price of the exchange is called the //strike price//. The date on which the agreement expires is the //expiry date// of the call option. The amount of money required to purchase this call option is called the //premium//. If the exchange takes place, then one is said to have //exercised the call option//. <span style="font-family: 'Palatino Linotype',serif;">Call option premiums are always quoted per stock, but sold in lots of 100 shares minimum. Call options are always an agreement about being able to purchase the stock at the agreed upon price. Call options come in both European style and American style. <span style="font-family: 'Palatino Linotype',serif;">European style call options are sold on European exchanges, while American style call options are sold in North American exchanges. The difference is quite simple. European options can only be exercised on the expiry day, while American style options can be exercised at any time during the life of the call option. <span style="font-family: 'Palatino Linotype',serif;">Call options are frequently described by the relationship of the strike price to the stock price. A call option for which the strike price is equal to the stock price is said to be an "at the money" call option. If the strike price is above the stock price, the call option is said to be an "out of the money" call option. Finally, if the strike price is less than the stock price, the call option is said to be "in the money". <span style="font-family: 'Palatino Linotype',serif;">There are two investment styles when investing in call options. Conservative investors sell an "out of the money" call option on a stock that is part of their portfolio to increase the overall return on their portfolio. The intention is that the stock price will not increase at such a rate that it becomes equal to or greater than the strike price. In this case, the investor gets to keep the premium and the stock, and the call option expires worthless. The process will then be repeated. <span style="font-family: 'Palatino Linotype',serif;">The speculative call option investor will purchase "at the money" call options without owning the underlying stock. The expectation is that the price of the call option will increase as the price of the stock increases. Typically, if the stock price increases by one US dollar (USD), the price of the call option will also increase by one USD. However, since the call option may cost as little as one tenth of the stock, the rate of return on the investment is much higher with the call option than it would be if the stock were purchased. <span style="font-family: 'Palatino Linotype',serif;">For example, if the stock cost 10 USD, then the call option for this stock for a 10 USD strike price could cost 1 USD. If the stock were to increase in price to 11 USD, the profit with the stock purchase is 1 USD and equal to a 10% return; however, the call option profit is also 1 USD, and since only 1 USD was invested, a 100% return is realized. However, if the price were to drop to 9.50 USD, the call option would become worthless and the entire 1 USD investment would be lost, while only 0.50 USD would be lost with the stock purchase. With the leverage, a call option provides that gains are magnified, but losses are as well. The stock owner would also receive any dividends paid out, while the owner of a call option would not.

<span style="font-family: 'Palatino Linotype',serif;">Futures are a financial derivative known as a //forward// // contract //. A futures contract obligates the seller to provide a commodity or other asset to the buyer at an agreed-upon date. Futures are widely traded for commodities such as sugar, coffee, oil and wheat , as well as for financial instruments such as stock market indexes, government bonds and foreign currencies. <span style="font-family: 'Palatino Linotype',serif;">The earliest known futures contract is recorded by Aristotle in the story of Thales, an ancient Greek philosopher. Believing that the upcoming olive harvest would be especially bountiful, Thales entered into agreements with the owners of all the olive oil presses in the region. In exchange for a small deposit months ahead of the harvest, Thales obtained the right to lease the presses at market prices during the harvest. As it turned out, Thales was correct about the harvest, demand for oil presses boomed, and he made a great deal of money. <span style="font-family: 'Palatino Linotype',serif;">By the 12th century, futures contracts had become a staple of European trade fairs. At the time, traveling with large quantities of goods was time-consuming and dangerous. Fair vendors instead traveled with display samples and sold futures for larger quantities to be delivered at a later date. By the 17th century, futures contracts were common enough that widespread speculation in them drove the Dutch Tulip Mania, in which prices for tulip bulbs became exorbitant. Most money changing hands during the mania was, in fact, for futures on tulips, not for tulips themselves. In Japan, the first recorded rice futures date from 17th century Osaka. These futures offered the rice seller some protection from bad weather or acts of war. In the United States, the Chicago Board of Trade opened the first futures market in 1868, with contracts for wheat, pork bellies and copper. <span style="font-family: 'Palatino Linotype',serif;">By the early 1970s, trading in futures and other derivatives had exploded in volume. The pricing models developed by Fischer Black and Myron Scholes allowed investors and speculators to rapidly price futures and options on futures. To supply the demand for new types of futures, major exchanges expanded or opened across the globe, principally in Chicago, New York and London. <span style="font-family: 'Palatino Linotype',serif;">Exchanges play a vital role in futures trading. Each futures contract is characterized by a number of factors, including the nature of the underlying asset, when it must be delivered, the currency of the transaction, at what point the contract stops trading, and the tick size, or minimum legal change in price. By standardizing these factors across a wide range of futures contracts, the exchanges create a large, predictable marketplace. <span style="font-family: 'Palatino Linotype',serif;">Futures trading is not without significant risk. Because futures contracts generally entail high levels of leverage, they have been at the heart of many market blowups. Nick Leeson and Barings Bank, Enron and Metallgesellshaft are just a few of the infamous names associated with futures-driven financial disasters. The most famous of all may well be Long Term Capital Management (LTCM); despite having both Fischer Black and Myron Scholes on their payroll, both Nobel Laureates, LTCM managed to lose so much money so rapidly that the Federal Reserve Bank of the United States was forced to intervene and arrange a bailout to prevent a meltdown of the entire financial system. <span style="font-family: 'Palatino Linotype',serif;">In the United States, futures transactions are regulated by the Commodity Futures Trading Commission.

<span style="font-family: 'Palatino Linotype',serif;">The yield curve is a simple financial chart or graph. The chart shows investors from around the world what to expect in the future from the US Federal Reserve. It also shows the effects the reserve will have on US interest rates, economy and inflation. A yield is commonly defined as a crop or harvest; in this case the harvest is financial. <span style="font-family: 'Palatino Linotype',serif;">They yield curve shows the present yields of the Treasury's securities at different stages of maturity. From 30 year T-bonds to 3 month T-bills, future expectations can be plotted on the yield curve chart. People who work in the field of finance, such as bond investors, analyze the yield curve and try to work out its meaning for the future. Using the chart, bond investors try to work out different yields expected on short-term securities compared to long term ones. <span style="font-family: 'Palatino Linotype',serif;">Long-term maturities usually have higher yields than short-term ones; this is seen as a normal yield. As this is the norm, it is shown on the chart as a positive slope. The curve is inverted on the chart when the opposite applies, and short-term maturities give out a greater yield. The Federal Reserve controls short-term interest rates; this is why short-term maturities give out a lower, longer yield. <span style="font-family: 'Palatino Linotype',serif;">The shape of the curve on the yield curve chart holds a variety of meanings for bond investors, but there are two basic ways of viewing it. If the shape of the curve is positive, then it is expected that the Federal Reserve's monetary position will be friendly towards the financial market. A friendly financial position is good for the economy, and stocks and shares. Therefore, if the yield curve on the chart is steep, it is a good sign for investors. <span style="font-family: 'Palatino Linotype',serif;">If the slope is negatively curved or inverted, this indicates that the Federal Reserve's stance is unfriendly. The Federal Reserve will be engaged in a strategy to try and slow the economy. They do this by raising short-term interest rates. In general, this indicates a poor set of conditions for the market and the economy. <span style="font-family: 'Palatino Linotype',serif;">Research has shown that the yield curve is a better predictor of the economy than studying the stock market. The yield curve has the ability to predict economic events around 12 months in advance. The stock markets can only predict six to nine months in advance. If you study the yield curve, it may give you an information advantage when buying stocks, shares and securities.

<span style="font-family: 'Palatino Linotype',serif;">An investment bank is a financial firm which specializes in the sale and management of securities such as stocks and bonds, rather than just handling cash funds like a traditional bank. Investment banks and traditional banks are separated financially because they handle different type of economic transactions, and in the United States are legally separated by the Banking Act of 1933, which was designed to increase economic stability during the Great Depression. Most investment banks handle securities from multiple nations, and are used by governments, individuals, and institutions. <span style="font-family: 'Palatino Linotype',serif;">Many companies make use of the services of investment banks to handle their securities. For example, if a privately held company decides to sell public stocks, it will sell all of its stock to an investment bank, which will in turn offer the stocks for sale to the public. Usually, multiple investment banks will cooperate on the issue of new stocks, to make the venture less risky for all involved. Many investment banks also combine brokerage services, so that individuals interested in investing can consult with staff at the investment bank to make sound investments which will make solid returns. <span style="font-family: 'Palatino Linotype',serif;">Many institutions take advantage of the brokerage service provided by an investment bank as well. Educational institutions and nonprofits will allow the knowledgeable staff at an investment bank to manage their assets, so that they can concentrate on delivering services. When well managed, these assets will support the services of the institution and allow improvement. <span style="font-family: 'Palatino Linotype',serif;"> Corporations will often turn to an investment bank to help raise capital, as is the case with stock sales. In addition, investment banks can assist with mergers and acquisitions, making the process much smoother for all involved and ensuring that all legal requirements are followed. Most also maintain extensive records on the credit and financial viability of their corporate clients, so that they can make calculated decisions which reduce the amount of risk involved. <span style="font-family: 'Palatino Linotype',serif;">By spreading investments and securities management globally, an investment bank ensures a wide coverage of multiple financial markets. Staff analysts specialize in particular economic regions and provide investment advice based on their education and experience which is intended to enhance profits for the parent company and its clients. By managing investments sensibly and taking calculated risks, an investment bank can flourish in the global market.