Banks hold 100% of their checking deposits as vault cash to ensure that bank runs do not occur.

Name: Banks hold 100% of their checking deposits as vault cash to ensure that bank runs do not occur.
Brand: Quizplus
Rating: 4.8 (50 reviews)

Question

Quizplus · Accepted Answer

Banks do not hold 100% of their checking deposits as vault cash. Instead, they hold a portion of their deposits as required reserves with the Federal Reserve and use the remaining funds to make loans and investments. This helps them earn interest income and generate profits for their shareholders.

Banks Hold 100% of Their Checking Deposits as Vault Cash