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Banking Services in USA
There are some thousands of commercial banks and trust companies in America. The biggest American banks (by assets) include Barnett Bank, Bank of America, Sun Bank, Capital Bank and the Intercontinental Bank. Barnett Bank is by far the largest in America, although it operates separately in each county, where assets are held independently. Note that there are numerous small banks in America, many of which operate in one county only. Around 1,500 privately-owned banks are required to maintain sizeable interest-free reserves with the Federal Reserve (the ‘Fed’), which is composed of 12 federal reserve banks that act as the country’s central bank, executing national monetary policy and setting interest rates in cooperation with the Treasury.
There are two main types of banks in America, ‘commercial’ banks and ‘savings’ banks or savings and loan associations, known simply as S and Ls or ‘thrifts’. Commercial banks usually offer a wider choice of services, while savings banks may offer a better rate of interest. Savings banks and savings and loan associations are granted government charters to collect deposits and make home loans, and they hold half of all American home mortgages. Since deregulation of the savings and loan industry in 1982 (intended to increase competition), the number of thrifts has fallen from 4,000 to around 1,000. America’s commercial banks, on the other hand, have made record profits in the last few years, with higher fees accounting for some 25 per cent of income, and cash-rich banks are increasingly concerned about finding borrowers for their money.
When selecting a bank, you should choose one that’s covered by the FDIC guarantee (see below). Among the largest American banks (by assets) are Citibank, Bank of America, Chase Manhattan, Morgan Guaranty, Manufacturers Hanover, Security Pacific, Wells Fargo, Bankers Trust New York, Chemical Bank and the Bank of New York. Note, however, that you may be better served by a small bank, where you’re more likely to be treated as an individual than an account number. You should also ask about such things as credit card fees and interest rates, loans, overdrafts and other services. America’s banks compete vigorously for new customers and provide comprehensive information packages for newcomers. Most offer special deals for ‘senior citizens’ (e.g. those aged 55 or over) which may include no-fee current accounts, no minimum balances, brokerage service commission discounts, a bank-by-mail service, free notary service, no-fee credit cards, $ 100,000 in free accidental death travel insurance, and free travellers’ and cashier’s cheques. Many Americans verify a bank’s financial standing before opening an account. To find out how safe a bank is contact Veribanc (1-800-442-2657, www.veribanc.com) or Weiss Ratings (1-800-229-9222, www.weissratings.com). Veribanc provides an instant rating of any of America’s 25,000 banks over the telephone, with written confirmation, for $10, a short report for $25 to $40, and a ‘Blue Ribbon’ report for up to $240; or you can obtain a state report covering all banks in America for $110 or a State 50 report covering the 50 largest banks for $50. Weiss Ratings evaluates around 10,000 banks (as well as 5,000 other financial institutions) every three months and will provide you with a rating of a particular bank for $15 by telephone or for $8 via the Internet.
America invented drive-in (or drive-up) banks, where Americans (who live in their cars) can obtain cash without leaving their vehicles. Some banks have auto-tellers placed at car window height while others have a complicated system of vacuum pipes, microphones and loudspeakers used to conduct business with an invisible teller. If you’re unfamiliar with this method of doing business, take time to read the instructions before attempting it. You can also drive up to a window and conduct business face-to-face with a teller, as you would in any bank. Drive-in banks can also be used by motorcyclists, cyclists and even pedestrians.
In some respects, the US banking system is ‘primitive’ in comparison with other western nations and standards vary considerably. Many banks’ business is restricted to a particular city, county or state (or a number of states). Some banks have just one branch and many have just a few local branches. There are no nation-wide banks with the vast branch networks and influence of, for example, major European banks. For many years, major banks were prohibited from interstate branching to protect smaller banks from unfair competition, although a bill passed in 1994 allowed banks to open branches anywhere in America from June 1st 1997. Consequently the US banking system is far less integrated than the European system. There’s no national cheque clearing system in America, which relies mainly on bank-owned clearing houses to handle fund transfers and clear cheques (the average cheque must clear three banks before being returned). There are 48 Federal Reserve cheque processing regions (one for each state) in America and a cheque is considered to be a ‘local’ cheque only when it’s deposited in the same processing region as the bank it’s drawn on. Find More information about banking >>
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