Multiple choice

In banking, funds set aside for emergencies, such as a rush withdrawal, are called:

  1. cash on hand

  2. minimum balances

  3. reserves

  4. safe deposits

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Reserves are the portion of deposits that banks are required to keep on hand (either in their vaults or at the central bank) to meet withdrawal demands and regulatory requirements.