BANKING AFFAIRS

Detailed explanation-1: -A deposit is essentially your money that you transfer to another party, such as when you move funds into a checking account at a bank or credit union. In the case of depositing money into a bank account, you can withdraw the money at any time, transfer it to another person’s account, or use it to make purchases.

Detailed explanation-2: -In short, banks don’t take the money that you deposit, turn around and loan it at a higher interest rate. But they do use the money you deposit to balance their books and meet the necessary cash reserves that make those loans possible.

Detailed explanation-3: -Banks allow people to deposit their money as savings. These savings earn them a small interest when withdrawn. The deposits made can be withdrawn at any time. This is called demand deposit.