Tuesday, August 23, 2016

What Is the Difference Between A Stock Exchange and A Bank?

Dear Ms.Thaiyal Nayaki!
A stock exchange is an open market place where financial instruments like shares (also called stocks) and bonds are traded. In earlier days brokers used go physically to the stock exchange and used to buy and sell shares and bonds on behalf of their clients/ customers. Nowadays with the advent of internet these trades are conducted in an online format.
A bank is an organisation which which collects deposits from customers and lends to a different set of customers. Deposits are collected in various categories like savings, fixed, recurring deposits, etc. Banks pay interest to depositors and charge interest from borrowers. Banks also render allied financia; services like issuing ‘Bank Guarantees’, opening ‘Letters of Credit (LCs)’ etc., for a fee.
If you want to learn more about finance and investing, you may regularly visit my blog,Value Investing, which is updated quite frequently.
Thank you,

Please Note: This is a reproduction of the question I had answered on the website ‘Quora’, which I thought could be useful to the visitors to this blog site also.

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