How Banks Work by Sheila Bair

Author:Sheila Bair
Language: eng
Format: epub
Publisher: Highlights for Children, Inc.
Published: 2015-01-15T00:00:00+00:00

Banks help keep money safe.

A bank doesn’t lend all of its depositors’ money. It always holds plenty of money back to make sure it has enough when people want to take their money out. Banks must obey strict rules about this. Also, a government agency called the Federal Deposit Insurance Corporation, or FDIC, insures deposits at most banks up to $100,000. That means that if your bank got into trouble and couldn’t give your money back, this agency would step in and pay you back, up to $100,000. That hardly ever happens, but when you open a bank account, it’s a good idea to make sure your money is insured by the FDIC.

Banks have changed a lot since I was a little girl. But they still take deposits and make loans, just as they did when I peeked into my bank’s vault so many years ago. Though I didn’t know it then, there’s one thing I know now. All your money may not be locked inside the thick walls of your bank’s vault, but it’s as safe as it can be.

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