👉 Deposit math is a financial concept that describes the relationship between deposits and withdrawals in a bank or financial institution over time. It essentially involves calculating the balance of deposits minus withdrawals, which gives the net change in the bank's assets. This concept is crucial for understanding a bank's liquidity and profitability, as it directly impacts the funds available to meet customer withdrawals while maintaining operational efficiency. The formula for deposit math is typically expressed as: Deposits - Withdrawals = Net Change in Balance. This balance fluctuates daily, with deposits coming from various sources like customer transactions and savings accounts, while withdrawals are made through loans, cash withdrawals, and other customer demands. The net change in balance, or deposit math, helps banks manage their cash reserves and ensure they can meet customer needs without resorting to costly short-term borrowing.
