Dela Cruz, Juan A.

BSStat 1-A
GEC MMW December 2021

DEPOSITS
Activity 24

I. Introduction
The money that peoples and corporations deposit into accounts at financial
organizations, such banks, is referred to as a deposit. There are numerous sorts of
deposits, including certificates of deposit, savings accounts, and checking accounts
"CDs".
Checking accounts are made for regular operations like bill payment and shopping.
They frequently have low or no minimum balance requirements and typically provide
simple access to funds. On the other hand, savings accounts are intended for long-term
investments and typically provide higher interest rates than checking accounts. Time
deposits known as CDs offer a fixed interest rate for a predetermined amount of time,
typically from a few months to several years.
II. Contents
Deposits also play an important role in the economy by providing financial institutions
with a source of funding that they can use to make loans to other individuals and
businesses. This helps to stimulate economic growth by providing consumers with the
means to purchase goods and services. Deposit insurance provided by the PDIC is a
crucial component. The Philippine Deposit Insurance Corporation offers PDIC
insurance, which safeguards depositors' money in the event that a banking institution
collapses. Deposits up to is PHP 500. This means that deposits of PHP 500 or more in
a closed bank are eligible for deposit insurance coverage, up to a maximum of PHP
500,000 per depositor per bank covered by insurance

III. Economic Value

The fact that deposits can be utilized as loan collateral is another significant feature of
deposits. In other words, a person may use the money in their deposit account as
security for a loan, such a mortgage or car loan. Deposits are a crucial aspect of the
economy as they provide the funds for banks to lend to businesses and individuals. This
lending, in turn, drives economic growth as it allows for investment in new projects,
expansion of existing businesses, and the purchase of goods and services. Additionally,
deposits are a source of stability for the banking system as they serve as a buffer
against potential losses. Deposits also serve as a liquid asset for individuals and
businesses, providing them with a means to access cash quickly in times of need.
Overall, deposits play a vital role in facilitating economic growth and stability.