Question

The deposits sharing the essential feature of money are called _____.

• A. fixed deposits
• B. saving deposits
• C. demand deposits
• D. regular deposits

Answer 1

Answer: (C)

demand deposits

• Demand deposits are the deposits mobilized by the commercial banks from its customers.
  
• On demand of the customers, the banks should be able to return the deposits back to them.
  
• Demand deposits makes it possible to settle payments without the use of cash.
  
• Some banks provide insurance against the deposits made by the customers.
  
• Demand deposits will be used to calculate 'Broad money', 'Narrow money' in the country.