Money

Bank notes can be used as a means of trade, especially with large amounts of money. Bank notes are not considered legal tender in the sense that they can be traded freely as with vouchers. Bank notes must be connected to specific accounts. A person can use a banknote to pay a sum of money in their account to an individual or company. The banks have their own fees as to amounts transferred, depending on whether the receiver has an account with the bank, with another bank connected to their system, with another bank not connected to their system, or no accounts at all.

Typically, though not always, banks do not charge fees for money transfers within the bank. This is because no actual money is being exchanged, but a simple accounting process is recorded to show the transfer of funds.

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Banks also try to avoid physical money transfers by trading funds within their system. They simply match up financial amounts between an array of clients to minimize the physical transfer of actual money. For example, if person A has 50 gold in Bank 1 that they want to transfer via banknote to person B, who has an account at Bank 2, Bank 1 and 2 will enter into a lunar communication. Bank 2 will realize that they have person C who wants to transfer 30 gold to person D who also has an account at Bank 1. Therefore, instead of Bank 1 sending 50 vouchers to Bank 2, and then Bank 2 sending 30 vouchers back, Bank 1 will simply send 20 vouchers to Bank 2. This minimizes the physical transfer of assets, lessens the cost of couriers, and minimizes the chances of robbery and the amount stolen when money is robbed en route.

Banks within the same system usually have a lunar board where they can see the transactions between the banks within their system. This allows them to do this kind of accounting manipulation between several banks at a time. For example, person A has 50 gold in Bank 1 that they want to transfer via banknote to person B, who has an account at Bank 2. Bank 1 which is a part of the same system of banks as Bank 2, posts the transfer to their lunar communication board. Bank 2 has person C wanting to transfer 30 gold to person D, who has an account at Bank 3, which is also in their system. Bank 3 has person E who wants to transfer 30 gold to person F, who has an account at Bank 1. This exchange would end with Bank 1 physically sending 20 gold to Bank 2, and no other funds being physically transferred, with the other transfers only being recorded on paper. Banks that are not within the same system can only do this kind of accounting manipulation between the two banks involved in the transfer. Because of this, transaction costs between banks in the same system will have lower transaction costs, while banks outside the system will have higher transfer costs. Transfers to individuals/businesses without accounts have the highest transaction costs, as the transfer is always the complete amount.

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According to law, all bank transactions must be settled within two weeks. Therefore, transfers can take as little as 1 day, and as many as 14 days to transfer funds via banknotes. The duration is dependent on how long it takes for banks to match up transfer funds, and the actual physical transfer of money if that is required. Rush transfers, where the transfer is rushed to be completed within two days compel extra fees.

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Another reason for limiting the physical transfer of actual money is that banks are required by law to keep at least 20% of their actual financial holdings in their vaults at any given time. Banks typically keep around 25% of their actual financial holdings to avoid breaking the law. For the rest of their financial holdings, they are free to lend to people asking for loans. The bank workers are typically paid with money made from these loans. The majority of banks do not charge their customers to keep their money at the bank.

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Depending on the bank, customers can withdraw a certain amount of money from their account immediately, without waiting and without incurring a fee. Different banks have different rules of withdrawal, but typically do not charge an immediate withdrawal if the amount is under two gold in value. Larger amounts can be withdrawn, but they typically require a waiting period of at least a week, and up to a month depending on the amount the individual wishes to withdraw. Immediate withdrawal fees are higher the larger the amount withdrawn. These fees are detailed in the bank holder's contract that they sign at the time accounts are set up. Transfer fees are also detailed in these contracts prior to any transfers being made. This is to avoid people suing banks for taking too much of their money in fees.

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According to law, banks are financially responsible for money being stolen. If a thief steals 10000 gold from a bank, the account holders still have the same amount of money in their accounts, and the banks must take the loss. Banks, therefore, do everything possible to ensure the security of their assets, including minimizing the amount of physical money being transferred; using armed, magical security; and gold lining their vaults. They also pay large bounties for the retrieval of assets stolen.

Banks also typically pay into an insurance fund within their system of banks that will pay a certain amount in case of theft or loss. These insurances typically do not pay the entire amount stolen, but the amount stolen up to a certain amount. This amount is dependent on how much money an individual bank pays into these funds. For example, Bank 1 might pay 1 gold a month into the fund to receive up to 100 gold in insurance payouts. Bank 2 might pay 2 bronze for 40 in coverage, and Bank 3 might pay 1 bronze for 10 gold in coverage. If 40 gold is stolen, Bank 1 would only receive 40 despite the 100 in coverage, since only 40 was stolen. Bank 2 would receive 40 gold, equal to the coverage and the amount stolen. Bank 3 would only receive 20 gold, even though 40 was stolen. This is because Bank 3 only had 10 gold worth of coverage.

Because the amount paid into the fund is smaller than the amount of coverage, insurance companies often require certain levels of security at individual banks. If sufficient security is deemed to not have been met, coverage could be lessened or outright denied. Security requirements must be detailed in insurance contracts beforehand in order to effect policy payouts. Addendums can be made to security requirements if insurance groups find a previously unknown weakness in the existing standards. However, if an addendum is made after the insurance contract is signed, the insured agencies have a month to respond if they wish to continue with their coverage under the new conditions. Then they have a month to comply with the new security measures. If money is stolen from the insured agency during this two-month period, no penalty can be incurred, as long as the previous standards were met. Only after this two-month period can the agency be penalized for not complying with the addendum to the security standards. Insurance funds might have multiple tiers in security requirements, where if security requirements are not met the insured individual has different levels of coverage. For example, if Bank 1, which pays 1 gold a month for 100 gold of coverage, has armed magical security, but not a gold-lined vault, they may have a 50% tier coverage, so they would only be eligible for 50% of the payout. Therefore, if 40 gold is stolen from them, even though they have 100 gold in coverage, they would still only be eligible for 20 gold, because the payout is equal to the amount stolen, or the amount covered, whichever is lower. After that, the 50% tier coverage is applied. This tier coverage applies, whether or not a security flaw was the reason for the money being stolen.