Bank
In short
A financial institution that accepts money from the public to keep it safe and provides loans to individuals or businesses.
In plain words
You give your extra money to a bank for safekeeping. In return, the bank uses some of that money to lend to others, charging interest to make a profit.
A simple example
If you deposit £1,000 into a savings account, the bank might lend £800 of that money to someone else to buy a car.
Why it matters
Banks keep the economy moving by making sure money flows from savers to people who need to invest or spend. They also provide essential services like processing payments and managing credit.
Easy to mix up
Do not confuse a bank with a building society, which is owned by its members rather than shareholders.