Before the money system came into existence, the barter system was being followed all over the world – it was an absolutely simple system without any headaches – you could exchange a bag of grain for a sheep or two, a bag of rice for something else, and so on. After the advent of the money system, things changed dramatically and rather drastically – and life was not the same again for he could now think of saving something for a rainy day. With the invention of money, came the concept of saving. And, before the concept of banking, as we see it in the present day came into being, everyone would have heard of their fathers and forefathers, before them, hiding money in all the conceivable and inconceivable places – in pots and pans, under a tree, or somewhere in the fields.The money system was introduced and for it to be developed it was necessary to keep the system secure in such a way that money could not be easily stolen. It was thus that an intricate financial system came into existence and was more and more developed. Now, in plain terms what is it that banks do? The answer is very simple – accept deposits and keep the money safe for you, and lend money to people who require loans and qualify for them. Today, we find that changes which have taken all around us has also invaded the banking industry and we see banks with the finest state-of-the-art technology with the most sophisticated systems. Banking has come a very long way from the banking of yesteryears to today’s electronic money transfers and instant cash. People have implicit trust in the banks and would rather keep their money in there than anywhere else.

Banks money to people for their various needs – to open a business, to start an industry, to build a house, or for any other reason. And, if the banks have to make a profit they will have to charge higher rates of interest on the money they lend to enable them to pay interest to depositors and make a profit.

Step into any bank and look at the wide range of services that they have to offer. Should you desire to open a deposit account, take a look at the wide range of accounts that the bank has, and choose the one to suit your needs.

Current Accounts

If you desire to open an account for business purposes, you can open a Current Account which is also known as Cheque Account or a business account. The account holder can deposit money into the account and withdraw it any time he likes. He can issue cheques to his vendors, creditors, or to any person to whom he has to make payments. ATM cards can also be used to draw money, make payments to others, or to make purchases. Most of the banks do not pay interest on these accounts, but banks do levy bank charges to customers for making use of the banks facilities. Most of the banks stipulate a minimum balance to be maintained in the current account.

Savings Accounts

Customers can open these accounts to keep money for a short time or for short-term savings. Banks curtail the amount and number of times a savings customer can withdraw from the account. A few banks do issue cheque books for savings accounts, though almost all banks offer ATM cards to their customers. Banks stipulate a minimum amount to open the account and the same amount to be maintained in the account at all times. Charges are levied on those accounts which do not maintain the minimum balance and such accounts, if not operated, would be closed down. Savings accounts do earn some interest for the account holders, but the number of withdrawals and the amounts withdrawn are restricted depending on the bank.

Fixed Deposits or Time Deposits

Fixed deposit accounts are also known as time deposit accounts. These time deposit or term deposit accounts could be of various types – Fixed deposit accounts, Short deposit accounts, and Certificate of deposits, and the rate of interest varies according to the period. Amounts that are deposited for a longer period earn a higher rate of interest as opposed to deposits for shorter periods.

Time deposits are investments that are placed in the hands of the bank and are not easily accessible by the investor till the maturity date of the deposit. The investor gets a fixed interest at the end of the investment period, and the rate of interest is higher for longer periods than short-term periods. But, you should remember that very long-term deposit many not earn a very attractive rate of interest as compared to mid-term deposits. After the due date, the investor has the option of taking back the deposit or re-investing it for a further period.

In Kenya, as in many other countries, depositors are levied a penalty if they withdraw their funds before the due date. Sometimes, it happens that the investor not only loses the contracted interest, but he even has to forego a part of the principal amount as penalty.

Learn to make your investment work for you and earn interest for you. Always, look at investment options that can earn a higher rate of interest for you.

Entrepreneurial Learning

Many people wonder what is it that banks do? The answer is very simple – they accept deposits and keep the money safe for you, and lend money to people who require loans and qualify for them. Today, we find that changes which have taken all around us has also invaded the banking industry and we find that banks have the state-of-the-art technology with the most sophisticated systems. Banking has come a very long way from the banking of yesteryears to today’s electronic money transfers. People have implicit trust in the banks and would rather keep their money in there than anywhere else.

Leave a Comment

Your email address will not be published.

You may also like

Growing a Business

Want Great Guidance ? Find yourself a Super Mentor


They are the gods of small businesses, those inspired individuals who have achieved the highest levels of success. They can be the shining beacons who light up the path of running your business with their vision, wisdom and wealth of resources and contacts. They are The Mentors.

If you are fired with the passion to take your business to great heights, the best thing to do is find yourself a super mentor. Here are some tips to help in your quest

Pinpoint your Need

Sit down and focus your thoughts on your business growth strategy. Which area of the business needs a lift. Is is staffing, is it the finances, is it the production, is it the your lack of customers or is it the business as a whole that needs a makeover. Once you’ve zoomed in on the sore spot, this is where you need…

Read More
Growing a Business

Dreaming Big? You can Move Mountains with these Business Productivty Tips


You may be full of admiration for some people who seem to manage themselves and their work so usefully and efficiently. They seem to fit in so much productive work into the same number of hours which everyone has.. Let’s look what makes them tick and take a few tips.

Learn to identify your most productive hours

Its true, most productive people know which time of the day they can be most creative and efficient. They identify and allot these hours for the best part of their work. This way they are able to give their 100% awareness to the job and business productivity.

Early to rise- A winning habit

Waking up early is a personal habit that has all the plusses on its side. You need not necessarily go to work that early. It’s a habit that gives you more time for personal care, like mediation, exercise, walking,…

Read More
Growing a Business

Leadership Qualities that can make you an Icon


You may have reached the leadership position through sheer dedication to performance and a do or die attitude . Now that you are at the top, your viewpoint needs to change. You have to now be a role model, one whom others will look up to and follow. Here are some tips that can shape your leadership and management skills

Be Competent: Employees will look up to a leader who has good industry knowledge and management skills. If you do not possess these skills you should surround yourself with knowledgeable people who can offer good counsel. Competence is a trait all employees will admire.

Be Trustworthy: No one will look up to a person they cannot trust. Your employees will want to rely on you and count on you. In difficult situations, leaders are expected to apprise their employees of the situations and find solutions on how to address…

Read More
Raising Money

Are You offering Your Services Using the Right Pricing Strategies?


In these times of fierce competition, business people , mostly those that offer services and belong to the service based industry, are finding it a challenge to implement the right pricing strategies. It is virtually a struggle to set the right business price that will retain and attract the customers, and not drive them away. Follow these tips, the crucial dos and don’t s and you may be in a much better position to offer your services at the best price.

Maintain your Business identity and Dignity

If you are offering a unique or special product or service, don’t underrate it just because you want to build a better relationship with the customer. This will just cheapen your offering as another run of the mill. If its something special you are offering the customer, then communicate this fact to the client and get the equation right with the most…

Read More
Raising Money

What is a Fair Wage? How Do you Assess Fair Wage?


How do you figure out a fair wage?

This is a very common question for startups and small businesses. They can’t seem to decide or understand how to set wages and manage reputations at a time. They are determined to pay well but they also have to think about encouraging their employees to stay with them for a long time. This is why there is a need to think strategically.

Listed below are a few expert tips to help you decide:

Don’t Focus Only on Money

Money should never be the main focus for you or for your employees. You should decide on the wages in such a way that your employees are tied to your business. When your business does well they should be able to taste that success and vice versa.

Also, think about additional perks such as exclusive benefits and time off. Many employees value this more than the overall…

Read More
Raising Money

Tips to Winning Hard Negotiations With Ease


While some negotiations are easy, others are quite hard to win. If you stumble you will lose.

Whether it is a potential client or an investor, negotiations can be very tough and frustrating. The problem is that the moment you let your frustration overwhelm you, you will lose the deal and you will give in to whatever is being offered to you. In order to avoid that, here are tips to overcome tough times and to win even the hard negotiations:


Know your opponent as well as possible. This is the rule no matter what you do. You should understand your opponent to the T. Who the person is, what his culture is, what he thinks, what he stands for, how is his network, etc. are the questions you should ask yourself and answer through research before meeting up for the negotiation. Understanding the opponent will give you a great advantage.


Read More