What is demand deposit ?
Demand deposits are those deposits in the bank accounts which can be withdrawn in demand.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.