The History of Money · 2 min read
The Rise of Banking
From temple storehouses to Renaissance bankers and modern banks: how lending, deposits and ledgers shaped money.
Banking is older than coins. Ancient temples and palaces stored grain and precious metals and kept records of loans. Those careful records, or ledgers, are the ancestors of every bank statement.
Renaissance bankers
In medieval and Renaissance Italy, banking families helped merchants trade across Europe using letters of credit and double-entry bookkeeping, a record-keeping method still used today. The word "bank" is often traced to the Italian banco, the bench where money changers worked.
How banks work today
Banks take deposits and lend much of that money to others, earning interest on the loans and paying some interest to depositors. In the United States, deposits at insured banks are protected by the FDIC up to legal limits, which is why bank runs are far rarer than they once were.
Why it matters to you
Understanding banks helps you choose accounts wisely: low fees, insured deposits and a fair interest rate on savings. See our guide to emergency savings.
Updated November 15, 2026. General education only, not financial advice.