Banks are privately-owned institutions that, generally, accept deposits and make loans.
Deposits are money people leave in an institution with the understanding that they can get it back at any time or at an agreed-upon future time. A loan is money let out to a borrower to be generally paid back with interest. This action of taking deposits and making loans is called financial intermediation . A bank's business, however, does not end there. Most people and businesses pay their bills with bank checking accounts, placing banks at the center of our payments system.