Question

What are demand deposits and explain three of their features?

Answer 1

For saving money monthly or yearly people start opening a savings account. The deposits in the bank accounts can be withdrawn on demand, so these deposits are called demand deposits. Banks accept the deposits and also pay an interest rate on the deposits. In this way, people’s money is safe with the banks and it earns interest. It is authorised by the government of the country. Its demand and supply can be controlled RBI.