How are savings and investments related to banking? 3 ex. please.?

At heart they are all ways of making capital available.

Banks take the money of their depositors and pool that into a great big pile for loaning money out. You essentially loan your money to the bank, and the bank then loans that money out and attempts to make a profit on that money.

Saving/investments are simply a way of making capital available for other ways. Investments in things like stocks actually offer a portion of ownership in a company, whereas a loan does not.

Bonds are a form of investment that are actually loans themselves, but are loans directly to companies or governments. Instead of borrowing the money from a bank (remember this is indirectly a loan from their depositors), they borrow it directly from the bond holder, who can literally be anybody with enough money to buy the bond. Usually bonds are sold in $1,000 chunks.

Hope this helps.

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