Deposit rates refer to the interest rates that banks and financial institutions offer on deposits made by customers. These rates can vary based on the type of account, such as savings accounts or fixed deposits, and are influenced by factors like the central bank's monetary policy and market conditions. Higher deposit rates typically attract more customers looking to earn interest on their savings. When customers deposit money, they essentially lend it to the bank, which then uses these funds for loans and investments. The bank pays interest to depositors as a reward for allowing them to use their money. This relationship helps maintain liquidity in the financial system while providing a safe place for individuals to save their funds.