what are demand deposit? explain any 3 freatures of it.
Answers
Answer:
A demand deposit is an account with a bank or other financial institution that allows the depositor to withdraw his or her funds from the account without warning or with less than seven days' notice. Demand deposits are a key component of the M1 money supply calculated by the Federal Reserve.
- Demand deposits are those deposits in the bank accounts which can be withdrawn in demand.
- Demand deposits have the essential characteristics of money, that is, of a medium of exchange.
- They eliminate the double coincidence of wants, are a store of value, make transactions easier and are a standard for deferred payments.
- They are widely accepted as a means of payment along with currency. they constitute money in the modern economy
- Demand deposits are closely linked to the working of the modern banking systems
- People 's money remains safe when they are placed in the bank in the form of demand deposits.
- Through demand deposits, people earn interest on the money they deposit.
Answer:
Demand deposits, or non confidential money are funds held in demand accounts in commercial banks......
Explanation:
(i) The demand deposits encashable by issuing cheques have the essential features of money. (ii) They make it possible to directly settle payments without the use of cash. (iii) Since demand drafts/cheques are widely accepted as a means of payment along with currency, they constitute money in the modern economy.........
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