Pros and Cons of Banking

Banking is an industry that handles cash, credit, and other financial transactions. Lending activities can be either directly or indirectly through the capital market. They are very important in the financial stability of a country hence they are highly regulated.

Banking may deal with an individual or a company. It deals majorly with money that is borrowed and lent to individuals to get profit from the returns. There are various types of banks. These include: retail banks, commercial or cooperate banks and investment banks.

Pros and Cons of Banking

Pros of Banking

  1. Banks offer many options

Whether someone wants personal savings, trust funds, business checking account, the bank offers the services and this makes it easier for individuals to monitor their funds.

  1. They are convenient

If someone has a checking account can easily pay by check or through online pay bill and this makes it convenient for someone to get access to the services he or she needs from anywhere.

  1. They are safe

When the money is kept in the bank it will be protected from theft and fire cases that may occur anytime. Most people are encouraged to use the banks to save their money as it will reduce the risks of theft.

  1. Bank accounts are cheaper

It is cheaper to open and operate a bank account as it is free to open an account and a small fee is charged on the money kept there in case it is a saving account.

  1. They can help you access credit facilities

When someone has a bank account he or she will be able to get a credit facility from the bank provided the account is active. The person can use the money to invest in other fields hence serving as an improvement to the economy.

  1. Flexible

Once someone has an account with a certain bank can easily walk to any branch for the person to get the needed services hence it has made life easier for the people with bank accounts.

  1. Online banking

It is very easy for someone to work with online banking as he or she will be able to access the services of the bank from any place provided he or she is connected online hence more convenient for people working with it.

 

Cons of Banking

  1. Interest is paid on the borrowed money

In case the person has borrowed the money from the bank then some interest is put on the money which may be too expensive for the borrower.

  1. The long process of withdrawing a large sum of money

It takes a long process to withdraw a large sum of money which discourages people from using the services of banking.

  1. Easy to take your property in case of default

After taking some money on credit you have to pay back the money regardless of the financial situation or else the bank may take all your assets hence making people fear taking loans with the banks.

  1. High fee on the amount in the bank

When the money is on the account, the bank charges its service fees and this makes the money to reduce by some amount of which many people do not like the idea hence not able to use the banking services.

  1. Risk of fraud and robberies

There may be a fraud in the bank and this makes the members lose their money and also in case of the robbery they may not be able to return the money hence inconveniencing the plans of the people using the service of banking.

  1. Bankrupt of the bank

In case the bank goes bankrupt the members may lose their money thus not all banks are convenient to save with.

  1. Hackers may access your bank account

In case someone does online banking his or her account may be accessed by the hackers and this will make it possible for them to lose the money from their accounts.

  1. Not able to access the account where there is no internet

Online baking only operates well where there are internet services and this may make it impossible for the person to access the account when there is no internet hence not convenient.

Summary

As banks are safe most members of the public are encouraged to keep their money in the bank to avoid the risks of theft and any other calamities. Though the challenges that are faced with the banks should be minimized to encourage a lot of people to use banking services.

Leave a Comment