A deposit is money placed into a bank account for safekeeping. It can be cash, a check, or an electronic transfer. The bank credits the account and owes the depositor that amount. Deposits are the raw material of banking. Banks use them to make loans, which earn interest, which pays for the bank's operations and generates profit.

Deposits come in several forms. A demand deposit can be withdrawn at any time, like a checking account. A time deposit has a fixed term, like a certificate of deposit. A savings deposit earns interest and has limited withdrawals. Each type has different rules about access, interest, and minimum balances.

Deposit insurance protects depositors if a bank fails. In the United States, the Federal Deposit Insurance Corporation insures deposits up to $250,000 per depositor, per bank, per ownership category. The National Credit Union Administration provides similar coverage for credit unions. Most other countries have deposit insurance schemes as well. The coverage limit varies. In the European Union, it is €100,000. In the United Kingdom, it is £85,000.

Deposits are not risk-free. Inflation erodes their purchasing power. A savings account paying 0.5 percent interest while inflation runs at 3 percent loses value every year. That is why financial advisers recommend holding only enough cash for emergencies and short-term needs, and investing the rest. But deposits are safe, liquid, and insured. They are the foundation of personal finance.