However, there are many cases in which persons save for some moderately distant use--such as the purchase of furniture, of a piano, of a house.

The safety and convenience of time deposits, combined with the reward of a small rate of interest, cause great sums, in the aggregate, to be deposited as _temporary_ savings, which otherwise would be hoarded in the form of money and thus withdrawn from circulation.

In all such cases the time deposit is serving both as an investment and as a monetary fund for future use.

This is a great economy in the use of money, for experience shows that in the savings banks of America the average reserves of actual money kept against deposits are only about 1-1/2 per cent.

In countries where banks are little known, the amount of actual money hoarded is therefore vastly greater than it is in the United States where there are $5,000,000,000 of individual deposits in _regular_ savings banks, besides large sums in time deposits in commercial banks.
Demand deposits, while not money, clearly perform the function of a reserve of purchasing power for depositors and reduce by so much the amount of money each must keep at hand to meet his current needs of purchasing power.