How are deposits with the banks beneficial for individual as well as for the nation?

How are deposits with the banks beneficial for individual as well as for the nation? Explain with examples.

BENEFITS of Deposits to the Individual

  • Bank accepts the deposits and pays interest to the depositor.
  • Banks encourage and help people to save their money.
  • Deposits in the bank are safe.
  • People can withdraw the money as and when they require.
  • Banks also grant loan to people for a variety of purposes.

BENEFITS of Deposits to the Nation

  • Banks charge a higher interest rate on loans than what they offer on deposits the difference is the main source of income of banks.
  • Banks use the major portion of the deposits extend loans for various economic activities.
  • Bank promote agriculture by providing loan to the farmers who can increase their production by bringing new farm implements and make better arrangements for the
    . irrigation.
  • The banks are the backbone of the country‚Äôs trade.
  • Banks provide employment.