the term money in its widest sense covers anything which serves as a store of calue and a means of exchange legal tender is the name for actual notes issued by governments or authorized banks while instruments of credit such as cheques act as a substitute for legal tender.
today a banks primary function is to act as an intermediary between depositors and borrowers it serves as a reservoir of loanable money a bank accordingly makes main profits by lending part of its store of deposited money at fixed rates of interest these rates usually exceed the rates offered to depositors,
the whole system however is based on simple acts of trust between all concerned without this trust modern banking would be impossible.
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