Question

what are deposit demands ?explain any three features of it?

Answer 1

People with surplus money or extra amount deposit it in banks. The banks keep the money safe and give an interest on it. The deposits can be drawn at any time on demand by the depositors. That is why they are called 'demand deposits'.
The three features of it are:-
(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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Answer 2

Answer:

• Demand deposits are similar to money in the following ways:- The ability to use cheques against demand deposits allows for direct payment settlement without the usage of cash.
• Demand deposits, along with cash, comprise money in the modern economy because they are generally accepted as a form of payment.

Explanation:

People start creating savings accounts to save money on a regular or annual basis. Deposits in bank accounts that can be withdrawn on demand are referred to as demand deposits. Deposits are accepted by banks, which also pay interest on them. People's money is safe with the banks and generates interest in this way. The government of the country has given its approval. Its supply and demand can be managed by the RBI.