Question

The main purpose of a depository institution is to:

A. hold deposits in accounts and use that money to offer loans.
B. provide guaranteed payments to depositors under specific
conditions.
C. use deposited money to purchase stocks and bonds in order to
make a profit.
D. allow customers to deposit money into accounts at no charge.
SUBMIT

Answer 1

A. hold deposits in accounts and use that money to offer loans.

Answer 2

A. hold deposits in accounts and use that money to offer loans.

Step-by-step explanation:

Depository institutions include commercial banks, credit unions, among others. They provide a safe, secure, and convenient way for customers to save money and a source of credit for households and businesses. Depository institution offers interest on deposits and uses that money to extends loans at a higher interest.

Interest on loans is the main source of revenue for depository institutions. They create loans from customer deposits and facilitate household and business expansion in the economy.