Chapter VIII - As To Banks Page 02
BANKS AS LENDERS
The bank not only receives money on deposit, but it loans money under certain conditions.
Many merchants, builders, contractors and others often find it necessary to borrow money in order to carry on their business successfully.
If a man's business reputation is good, and the banks keep well posted in such matters, he may secure a loan on his own note, though even in such cases the name of a good endorser is required.
If in addition to his note the borrower can offer security in the way of bonds of good character, or other reliable collateral, he can usually be accommodated.
Of course, the banks charge interest for loans. They also make collections on notes and other commercial paper and they issue foreign and domestic bills of exchange.
Every man with a sum large or small in excess of his expenditures, should open a bank account. Even if not in business this will encourage thrift and lead to good business habits.
INTEREST ON DEPOSITS
Some banks, particularly those known as "state" or "private," and National banks in smaller communities, allow interest on deposits. This interest varies with the demand for money, but in the eastern states it seldom goes over four per cent.
It is well to know when interest begins and ends.
If the dates set by the bank for reckoning interest are the first day of January, April, July and October, money deposited March 31st will begin to draw interest next day, but if deposited April 2nd, it would not begin to draw interest till July 1st.
But if you have the money and would insure its safety, deposit it at once regardless of time or interest.
If a depositor withdraws his money before the day when interest is due, he forfeits the interest. But banks vary as to that.
CHECK AND DEPOSIT BOOKS
Every depositor is given a book in which the teller or cashier credits him on the left-hand side with the amount deposited. Other deposits are treated in the same way, and at proper times, if interest is allowed, it is added as a deposit.
The depositor can provide his own check book, and have it printed in any color he pleases, with the name of himself and business on the margin. The bank, however, will supply loose bank checks of its own, or it may provide them in book form, with stubs, or a space on which the number, amount and purpose of the check may be noted for the drawer's information.
"Writing up" of the deposit book is leaving it with the proper officer at the bank--a receipt for the book is never taken. It is returned with all the checks received, and their amount footed up on the right hand or debit page, and the balance on hand shown.
Every depositor should know from the record on the check stubs exactly how his account stands with the bank.
Take care that you do not overdraw.
Keep your own record of your own money.