Banking Functions
*Section Terms*
Deposits: Sums of money placed in accounts
Demand Deposits:deposit into a checking account and the depositor can take the money out whenever they demand.
Time Deposit: typically deposits left in banks for for months or years.
Withdrawal: taking money out of a savings account.
Interest: money banks pay to depositors for using their funds.
Mortgage:A pledge of property as a gurantee that a the loaned money nplus interest will be repaid .
Line of Credit: Arrangement in which bank customers can borrow a certain amount of money from the bank immediately.
All banks perform three basic functions they accept money, transfer money, and create money .
Accept Money

Accept money in the form of *deposit*. The bank holds the money until depositor needs it. Customers can make two types of deposits *Demand Deposit* and *time deposits* . Money in a checking account is like cash . Taking out of a savings account is *witndrawal*. In order to make a profit banks place some limits on savings account. An advantage of a *time deposit* is that money can earn *interest*

 

 
 
Transfer Money
   
 
Create Money