: Securely holding cash, securities, and other assets for consumers and businesses .
: Paying interest to depositors on their savings while charging a higher interest rate to borrowers (the difference is known as the interest rate spread ) . depository financial institution
: Bridging the gap between investors and borrowers by pooling deposits to issue mortgages, personal loans, and business credit . : Securely holding cash, securities, and other assets
A is a type of entity that is legally allowed to accept monetary deposits from the public, which it then uses to fund its lending activities . These institutions serve as vital intermediaries in the economy, channeling funds from "surplus units" (savers) to "deficit units" (borrowers) through various loan products . Primary Functions : Securely holding cash