What are ‘demand deposits’?

1.	What are ‘demand deposits’?
Answer» Demand deposit funds deposited in a bank account at a low or a zero interest rate, which allows depositors to directly withdraw their money and issue bank checks up to the limit of their account balance at any time. Banks accept the deposits and also pay an interest rate on the deposits. In this way, people’s money is safe with the banks and it earns an interest as well. People also have the provision to withdraw the money as and when they require. Since the deposits in the bank accounts can be withdrawn on demand, these deposits are called demand deposits.

Answer»

Demand deposit funds deposited in a bank account at a low or a zero interest rate, which allows depositors to directly withdraw their money and issue bank checks up to the limit of their account balance at any time.

Banks accept the deposits and also pay an interest rate on the deposits.
In this way, people’s money is safe with the banks and it earns an interest as well.
People also have the provision to withdraw the money as and when they require.
Since the deposits in the bank accounts can be withdrawn on demand, these deposits are called demand deposits.

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What are ‘demand deposits’?

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