Why does demand depositsconsidered as money
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Explanation:
Demand deposits are considered as money, because they can be withdrawn when required and the money withdrawn can be used for making payments. So, they are also considered as money in the modern economy.
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The demand deposits are considered as money because demand deposits are useful for making payments in form of a cheque.
What are the characteristics of demand deposits?
- There is no limit to withdrawing money and also there is no limit to maturity
- The demand deposits give customers money in the form of cash for their daily expenses
- In demand deposit, there is a joint account in which one person withdraw money without informing the other person
- In a demand deposit account, there is no penalty
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