The intimate relations between a bond house and its customers are furthered by certain of its banking operations. A special department is established for the safe deposit of funds which, together with accruals of interest and additions from time to time, the depositor purposes to invest in securities offered by the bond house. The banking department also makes loans to customers who wish to purchase securities but who have not sufficient funds to pay in full at the time of purchase. In conjunction with the deposits destined for purchase of securities, the banking department may accept other deposits subject to check; this service is, however, mainly incidental. It would seem best for the investment market and the commercial bank market to be kept relatively distinct. Some investment banks by adding service to service have become general banking institutions, handling securities, savings, trusts, and deposits.
A further activity of bond houses is to act as fiscal agents for business corporations and bodies politic. The payment of dividends, interest, and principal on stocks and bonds, the flotation of their securities and their financial advertising are all matters entrusted to well-known bond houses in the central markets. Undoubtedly this arrangement improves the financial stability of the country, for in performing these operations of corporate finance the bond houses seek to build and maintain a good-will which less permanent promoters would fail to consider.