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Deposit are secondary or derived from the primary deposits is known as _________.

  • Deposit are secondary or derived from the primary deposits is known as Secondary deposits.
  • When customers deposit money into their bank accounts, those funds become primary deposits.
  • Banks can then use a portion of those primary deposits to make loans to other customers, which creates secondary deposits.
  • Secondary deposits are also known as "derivative deposits" in some contexts, but this term is not commonly used in banking.
  • The more commonly used term for the process of creating secondary deposits is "credit creation.
  • " When a bank makes a loan, it creates new deposits in the banking system, which can then be used to make further loans and create even more deposits.