Q. 104.0( 6 Votes )

What are bank deposits? What are its benefits?

Answer :


Apart from holding money incurrency, people can also hold money by making


deposits in banks. This can bedone by creating an account in the bank and depositing extra cash in it.These are known as demand deposits.


Bank deposits are useful for both the people depositing the cash, as well as for the banks.


For the people, when they deposit money in the bank, they earn interest on the deposit. Further, theirmoney is safe and they can access it whenever they want.Further, people can use bank deposits in order to pay one anotherby


cheques, and therefore, nocash has tobe physically exchanged.


The banks use these deposits to extend out loans to people at a given interest rate,and it is through this procedure that banks make money.


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