Good opener to this 1,000 word article (about 5 minutes reading time) on the history of banking from NerdWallet. Here are a few interesting points (some of which I even remember!):
- During Civil War, government levied a tax on the use of banknotes
- FDIC originally insured deposits up to $5,000 in 1934 (that would be $91,000 in today’s dollars)
- Banks used to give out appliances to encourage consumers to set up accounts: “New customers received prizes when they opened new accounts — if you walked into a bank with a deposit in those days, you might leave with a toaster or an electric wall clock.”
- Banks actually used to pay out interest on savings accounts. We have been in a low-interest rate environment for about a year now.
- “In 1957, people could earn 3% interest. By 1986, some passbook savings accounts paid over 5%.”
- I can recall earning 15% per year on a 5 year CD during my youth. Taught me a great lesson in compounding interest!
- Most people still like to visit bank branches:
- “But don’t write off brick-and-mortar banks and branches just yet: In a 2016 study from the consulting firm Bain & Company, 92% of respondents over the age of 65 and 84% of people aged 18 to 24 said they had visited a teller at least once in the previous quarter.”
Interested in bank accounts? Check out this NGPF Activity on Selecting a Checking Account