WEEK SEVEN
TOPIC: NATIONAL ECONOMY – SAVING AND WAYS OF SAVING
CONTENT:
MEANING OF SAVINGS:
Saving refer to the process of keeping part of income earned and valuable such as jewellery and certificate for future use.
REASONS FOR SAVINGS
People save for following reasons:
1.TO PREPARE FOR OLD AGE: Many people that are inactive service now save for the time of old age, when they will not be strong enough to work or even or even earn income.
2. FOR FUTURE INVESTMENT: Those people who have intention of setting up small scale business in future can be setting aside money from their present income.
3. TO ACCUMULATE WEALTH: Some people save for the sake of keeping their money and increase their wealth.
4. FOR EMERGENCIES: People may save to meet unseen event or circumstances.
5. FOR SECURITY PURPOSE: Many people save money or keep their valuable in the bank due to insecurity in their house and offices.
6. TO SECURE LOAN: Many people save in co-operative society for this reasons e.g. Micro finance bank etc.
7. FUTURE PERSONAL PROJECT: This include building of houses; buying of cars etc.
WAYS OF SAVING IN THE PAST
- Digging the grounds
- In the clay pot
- Entrusted with money keepers
- Keeping money with relations
- Keeping money on the roof
- Box —– this box is made with wood or clay. They were usually called (Kolo bank) by little culture.
MODERN WAYS OF SAVING
- Banks
- Co-operative societies
- Insurance companies
- Buying of treasury bills
- Buying stocks
- Contributions
- Daily contributions
MEANING OF BANK
A bank is a financial institution established for safe keeping of money valuables and provision of other financial services.
TYPES OF BANK:
1. THE CENTRAL BANK: This is a bank that controls the activities of all banks in a country. The Central bank act as government bank, issues of currencies, control interest rates, grants loan to other banks and acts as controller to all other banks.
2. COMMERCIAL BANK: These includes all banks that deals directly with individual they help in safe keeping of money, valuables and important documents.
They also provide loan to individual and render other financial services to individual and co-operative organisation. Examples of Commercial banks are: Zenith Bank, Guarantee Trust Bank (GTB), First bank, United bank of Africa (UBA) etc. All Micro finance banks also fall under commercial banks.
Assignment:
1. Mention three methods of savings in the past and three methods of savings in the modern days.
2. Define bank and explain the importance of modern day banking.