Banking, Credit, & Debit

Money is the pillar upon which modern-day societies stand. Everything from food to amenities costs money. Thus, playing such an important role in how society functions and how we live our lives, it is vital to understand how this money is stored and tracked. This is where banking comes into play. Money is stored in banks, and while it may seem like a relatively easy concept to store money simply, several factors come into play that allow money to be moved in and out of banks. This blog aims to explain how banking works and why it is important, as well as how this information can help you. 

KEDM

There are three types of banking accounts: checking, savings, and certificates of deposit. Checking accounts allow for direct deposit and withdrawal of money from an account. It allows for money to be taken out in the form of debit or real money. Savings accounts allow for money to be saved for another large investment or emergencies. Finally, a certificate of deposit account, or a CD account, is essentially a locked account. In a CD account, you deposit an amount of money into an account,t then promise the bank not to open it until a certain date. Opening the account before that date e will result in a fee. Banks need to make money; thus, these forms of accounts exist all with fees and different regulations. 

Money works in the form of credit and debit. These concepts are near essential for being able to fully vitalize your knowledge of banking and accounting for endeavors you plan to pursue in the future. While not necessarily a banking concept and more of an accounting concept, I believe it is still worth understanding. Credit and debit are often used in the context of companies. Debit is usually an increase in assets and expenses but a loss in accounts. Debit is an increase in liabilities, ty equity, revenue,nue and accounts. For example, a $100 purchase for a company may be an increase in debit as an asset but is also $100 in credit as an expense. Keeping these two numbers equal is nearly essential for companies. While not essential for personal endeavors, if one plans to open a business, it is a vital part of opening one and should be understood. 

Negative Space

This begs the question ‘Why is any of this important?’Well,l for one simple reason, money needs to move. If a large sum of money stays stagnant for too long, it can begin to hurt both the owner of the money and the economy. This being said, money can't always be moving; it's a delicate balance of moving and keeping still. The idea of banking teaches how to keep money still, and credit and debit teach how to keep money moving while not causing a large amount of financial harm. 

Several regulations exist to ensure that the banking system is not abused. The Office of Financial Regulation(Florida’s used here), along with other counterparts, all maintain these regulations that allow for the system to exist as long as it has. I’ll explain a few important ones and what they are. Primarily, the National Bank Act of 1864 established the banking system that allows for the saving of money by companies. The Banking Act of 1933 separated commercial and investment banking to allow for different methods to be used for the forms of banking. Finally, the Bank Secrecy Act of 1970 allowed for government detection into bank accounts to check for illegal forms of income such as money laundering. 

 Thanks for reading. 

“Bank Accounts: Information and Resources.” Washington Department of Financial Institutions, Accessed 22 Jul. 2026, https://dfi.wa.gov/financial-education/information/checking-accounts.

Bichachi, Rebeca. “Accounting 101: Debits and Credits.”

Oracle Net Suite, 20 Mar. 2026, https://www.netsuite.com/portal/resource/articles/accounting/debits-credits.shtml

“Major U.S. Banking Laws”, Florida Office of Financial Regulation, Accessed 22 Jul. 2026, https://www.flofr.gov/docs/default-source/documents/major-banking-laws.pdf?sfvrsn=aa7fb84d_1