The savings deposit in a commercial bank is called____________?

1. Analyze the question The question asks what a savings deposit in a commercial bank is called. We need the term that describes savings held in a bank.

2. Explain the concepts

• Money is anything generally accepted as a medium of exchange, such as cash and current account (demand) deposits.
• Near money is an asset that is not directly spent like cash but can easily and quickly be converted into cash with little or no loss of value. Examples are savings deposits, fixed or time deposits, treasury bills and bills of exchange.
• Call money is money lent by commercial banks to discount houses or other banks. It is repayable on demand, or "at call". It is not an ordinary customer's savings deposit.
• Capital is a factor of production, meaning man-made resources used to produce other goods. It can also mean a firm's owned funds. It does not describe a savings deposit.
• Fund is a general word for a pool of money set aside for a purpose. It is too vague, and it is not the standard economic term for a savings deposit.

3. Work through the options A savings deposit cannot be spent directly like a cheque or cash. The depositor usually has to make a withdrawal first, so it is not money in the strict sense. However, it can be converted to cash easily and without loss of value. This is exactly the definition of near money.

• B (call money) is an interbank loan, not a customer's savings.
• C (capital) is a factor of production.
• D (fund) is too general.

4. Answer The correct option is A. near money.

5. Exam tip Remember: near money = nearly cash. Savings accounts, fixed deposits and treasury bills are all near money. Also link call money with "repayable on call", meaning interbank or discount house lending. JAMB often tests these two terms against each other.