You're missing something very important. Banks do not have a 1 to 1 accounting of deposits with cash. Hence why bank runs are a problem, in a panic situation where everyone wants to withdraw their money, they literally do not have it. So physical cash you deposit just sits around until someone else wants to make a withdraw. As long as your accounts are up to date and the bank isn't perceived as insolvent (by making too many bad loans), then we are all willing accept this situation.

You're missing something very important. Banks do not have a 1 to 1 accounting of deposits with cash. Hence why bank runs are a problem, in a panic situation where everyone wants to withdraw their money, they literally do not have it. So physical cash you deposit just sits around until someone else wants to make a withdrawal. As long as your accounts are up to date and the bank isn't perceived as insolvent (by making too many bad loans), then we are all willing accept this situation.