Bank is an organization which deals in money by accepting deposits and lending to those who need it. Accepting deposits is the primary function of a bank. It accepts demand deposits and time deposits. Demand deposits are those deposits which are payable on demand, and time deposits are those which are repayable after a specified period. The bank pays interest on the deposits (except deposits on current account).

Lending of money is another important function of a bank. It lends money to needy persons and organizations in the form of short-term advances, term loans, and overdraft facility. The bank collects interest on the amount lent. 

The bank also renders various other services to its customers such as

i.Collecting amounts due to the customer like interest, dividends, etc.,

ii.Making payments on behalf of the customer,

iii.Issuing letters of credit

iv.Providing travelers cheques

v.Accepting, collecting, paying and discounting bills of exchange,

vi.Providing safe deposit lockers for safe custody of valuables

vii.Furnishing guarantee on behalf of customers, etc.

The bank charges some amount for the services rendered to its customer.