Deposit reserve refers to the deposit prepared by financial institutions in the central bank to ensure the needs of customers to withdraw deposits and settle funds. Simply put, if you deposit your money in the bank, the bank will deposit a certain proportion of the money in the central bank according to the requirements of the central bank, which is called deposit reserve, to ensure that you and other depositors have enough money to pay when withdrawing money and avoid risks.

The increase in the bank's deposit reserve ratio means that the bank has more deposits in the central bank, less surplus funds for lending, and higher interest earned by lending to individuals. Therefore, in this case, individuals have to pay more interest to the bank than before.

Simply put, banks issue loans according to the deposits they receive, but it is risky to issue loans. In order to reduce the risk of banks, the People's Bank of China wants banks to deposit some money in the People's Bank of China, and the deposit ratio is the deposit reserve ratio. This part of the money is deposited in the People's Bank of China and cannot be used for lending.

Deposit reserve ratio = statutory reserve of central bank/deposits of commercial banks.

Personal influence:

1, indicating that money is tight and loans are difficult;

2. The available funds of banks are reduced, and the profits are limited, which indirectly affects the income of investors.