Because it is safer there but not at the moment!!
Fractional reserves is not a common way to save money in banks.
Banks generate a lot of income by loaning money deposited by customers out to other customers for fees and repayment with interest. This is the principle action that banks take with the money you deposit.
Under their mattresses, in their wallets etc.
high interest rate
There are two main reasons as to why people would save their money in a financial institution like a bank. They are: a. For safekeeping. Keeping a lot of money at home is not safe whereas banks and their vaults are very safe b. To earn an interest - Banks pay us an interest for having us deposit our money with them. This is an added incentive for people to park their savings with banks.
The fed attempts to make banks safe and sound because of what happened during the great depression, when the stock market crashed the banks had no way of insuring the people that there money was save to stay in the banks, and with that in mind thousands of people went and withdrew their life savings and caused the banks to have to shut down. and in doing so now they can provide people with the ability to sleep well knowing that there money is save
It allows consumers to save their money for long-term uses in saving accounts, and such. Also allows banks to offer cheques; this is where chequing accounts are used, for the amount of money written on a cheque is the amount of money taken out of your chequing account.
Socio-cultural trends can effect banks because individuals may not be able to pay back the money that they borrowed from banks when many citizens are not working. Also, people may not have the money to save and invest with banks in times of hardship.
In the olden days there were no banks so people used to keep their money under their heads
The government can provide nationwide savings through government owned banks. One can save with these banks and have money for one's retirement or to use in a business venture.
It let banks get reorganized and avoid falling.
Banks are the financial intermediaries of the economy. Without them there will be no financial prosperity. Banks accept deposits from people who have surplus and lend out loans to people who need the money. They offer other services like bank accounts, credit cards etc. So, the money you save in a bank will given out as a loan and will help someone else.