Question

What are 'demand deposits' ?

• A. Deposits with banks kept for at least 10 yrs
• B. Deposits with bank which can be withdrawn on demand
• C. Deposits in bank in form of jewellery only
• D. Deposits with banks kept for at least 5 yrs

Answer 1

The correct option is B Deposits with bank which can be withdrawn on demand

• 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.
• 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.
• The correct option is B.