Question

Give two advantages of depositing money with commercial banks.

Why do we deposit money with commercial banks?

Why do people deposit money in banks?

Answer 1

People keep their surplus money in banks because:

1. Safety: It protects funds against theft, loss, or fire and is legally backed by government deposit insurance.
2. Interest: It earns interest income on savings, which helps the money expand and against inflation.
3. Convenience: It provides quick access to digital payments, UPI, debit cards, and chequebooks for everyday transactions.
4. Loan Eligibility: It establishes a solid financial history, making it much easier to obtain future house or business loans.