Not sure if this has been answered but I'm almost sure this is the right place...

What does investing money in the banks do if anything beneficial...also what is the difference between local and federal banking if any?

Keeping it in the bank is safer than keeping it in your pockets

As for federal v local, your federal account can be accessed from any city, where as for local you have to be in that city. 

The use for the federal and local is mainly for Crew leader and sponsors.

When your associate or crew members makes money via Tax on pettys and felonys or buying and seeling drugs, the money earned is put into the local bank. So Crew leader have to be in the citys to take out the money made off his crew members.