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Personal Banking & Security
Basics of the banking industry
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What's the word for the gold a bank has in its vaults, which allows it to make loans?


The gold a bank has in its vaults is called its reserves.

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For the most accurate look at how inflation may affect you, you should see how it's changed over what time period?


Annual numbers will account for seasonal variations that might cause big but temporary changes from one month to the next.

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Key Takeaways

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Banks can be more than just places to keep your money. By understanding a few basics, you could make the most of what banks have to offer.

  • For a true comparison of the cost of things from one year to another, you need to adjust for inflation
  • A bank's main role is to connect people who want to save money and people who want to borrow money
  • Use a commercial bank for checking accounts, mortgages and things like that—investment banks mostly provide funding and more to businesses
  • A bank's income statement shows you how much money goes into and out of the bank at a given time