What are demand deposit? What are their advantages? Why are demand deposit considered as money?
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Demand Deposit is the method to deposit surplus money with bank.. 1) Banks accept deposited and also pay an amount as interest on the deposits. In this way, people's money is safe and also earn an amount of interest. ... 3)Demand deposit also supports cheque facilities making big money transactions easier.
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The deposits in the bank account which can be withdrawn on demand or without prior notice are known as Demand deposits.
Adavantages:
- As the name suggests you can withdraw your money anytime.
- There are no additional charges for withdrawing your money.
- You can also make transactions in cheque.
Demand deposits are considered as money because they can be withdrawn anytime and can be used for any purpose same as money.
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