Just as children have parents and grandparents, so does the family of banks. A local bank has a parent (or BIG) bank, and the grandparent of all banks is the Federal Reserve Bank System. There are 12 Federal Reserve Banks in the United States. They are in cities like Philadelphia, Cleveland, Chicago and Dallas. See the complete list of Federal Reserve District Banks.

Just as grandparents and parents watch and care for their children, the Federal Reserve Banks supervise our nation's banks to make sure they use their money wisely.

When local and parent banks have too much money, they send it to the Federal Reserve Bank for safekeeping. The Federal Reserve Bank of Chicago, for example, keeps about $9 billion on any given day. And when a local or parent bank needs money, they can get it from the Federal Reserve Bank.

The Federal Reserve Bank has a nickname. Just as you might call your grandfather "Poppie" or "Grandpa", the Federal Reserve Bank is often known as "The Fed".

While at The Fed, money that comes in from small banks is counted and checked. If the money is too worn out, it is shredded and replaced with new money. Millions of dollars get shredded each business day. New coins and paper money are sent to The Fed by the U.S. Mint and the Bureau of Engraving and Printing.

The Fed has big machines that check closely to make sure the money is real, not fake or "counterfeit."

As the grandaddy of the banking family, the Federal Reserve Bank keeps an eye on how much money American consumers are spending and saving. The Fed works hard to make sure the country's economy is in careful balance.