Money deposited in the banks are considered _____ of the banks.

The correct answer is Option (3) → Liabilities

Money deposited in banks by customers is considered a liability for the banks because:

• The bank owes this money to the depositors.

• Depositors can withdraw their money on demand (in case of demand deposits) or after a fixed time (in case of fixed deposits).

Since the bank is obligated to return the deposit amount, it is recorded on the liability side of the bank’s balance sheet.