what are Deposits ?

Deposits in Banking

 Deposits are one of the most basic functions of banking, and they refer to the money that individuals or businesses place in their accounts with a bank. Deposits can come in various forms, such as savings accounts, checking accounts, money market accounts, and certificates of deposit (CDs).

When someone makes a deposit, they are essentially entrusting their money to the bank, which holds the funds in a secure account. The bank then uses the money deposited to make loans to other customers or to invest in other financial assets, such as bonds or stocks. In return, the bank pays interest to the depositor, providing a way to earn a return on their money.

Deposits are an essential aspect of banking, as they provide a reliable source of funding for banks to use for lending and investing. For depositors, deposits provide a safe and secure way to store their money, while also providing the opportunity to earn interest on their balances.

Overall, deposits are a critical part of the banking system and play a crucial role in facilitating the flow of money in the economy.