Demand Deposit

A demand deposit is a type of bank account from which funds can be withdrawn at any time without any advance notice. These accounts typically offer easy access to funds and may include Checking accounts and some Savings Accounts. Demand deposits do not usually earn interest, or if they do, the rates are typically lower compared to time deposits.

Examples:

• Checking Account: A standard Checking account allows you to write Checks and use a debit card for purchases, providing immediate access to your funds.
• Online Savings Account: Some online Savings Accounts function as demand deposits, allowing withdrawals at any time, albeit sometimes with a limit on the number of monthly transactions.

Cases:

• Case 1: A person receives their payCheck and deposits it into a Checking account. They can immediately withdraw cash or make purchases.
• Case 2: A small business uses a demand deposit account to manage day-to-day expenses, allowing them to pay suppliers and employees as needed.