When a player collects some Star Bits, instead of carrying them around with them, they could deposit their star bits to Banktoad at Starship Mario. They could also withdraw their star bits as well.
For every thousand or two thousand star bits a player deposits to Banktoad, he will get different costumes that he'll wear. Also when a player deposits 9999 star bits to banktoad after collecting the Comet Medal on the Grandmaster Galaxy, the comet for the Grandmaster Galaxy is unlocked.
List of Banktoad costumes in order
0-999 Star Bits: Banktoad will simply hold a star bit
1000-1999 Star Bits: Banktoad will get some glasses
2000-3999 Star Bits: Banktoad will get a big spear and a shield
4000-5999 Star Bits: Banktoad will get a mining shovel
6000-7999 Star Bits: Banktoad will get a scuba diving mask
8000-9999 Star Bits: Banktoad will get a helmet with a light
9999 Star Bits is the maximum amount of Star Bits banktoad can hold.