Future Business Leaders of America (FBLA) Agribusiness Practice Test

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What is a deposit in banking terms?

  1. Money placed in a bank account by the account holder

  2. A loan given to a customer by the bank

  3. A withdrawal made from a bank account

  4. An investment made by the bank

The correct answer is: Money placed in a bank account by the account holder

A deposit in banking terms refers to the money that an account holder places into their bank account. This can include various types of accounts, such as checking accounts, savings accounts, or time deposits. When money is deposited, it becomes part of the financial institution's liabilities, as the bank is obligated to return that money to the account holder upon request. Deposits are essential for the operation of banks, as they provide the necessary funds that banks can use to offer loans to other customers, maintain liquidity, and generate interest income. Understanding the nature of deposits is fundamental to grasping how banking systems function and how they facilitate both individual and business financial transactions.

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