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Money placed into a financial intermediary for security and wealth generating purposes. This money gets placed into deposit accounts such as savings accounts and checking accounts. The placement of deposits allow banks to use these funds to lend to borrowers and that in turn allows banks to make their profits through the interest income channel.

Below is a diagram which highlights how banks act as an intermediary of funds between surplus units (total income exceeds total expenditure) and deficit units (total income exceeded by total expenditure). This is done by taking depostis from these savers and transferring them to borrowers through loans.

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