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Understanding Demand Deposits

Created by

@TopNotchFourier62

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Questions and Answers

What is a key characteristic of demand deposits?

They can only be accessed after a specified period.

They require a minimum balance to maintain.

They earn high-interest rates.

They can be withdrawn at any time. (correct)

Which of the following statements about demand deposit facilities is true?

They do not allow for cheque facilities.

They are only available to business accounts.

They allow for cheque facilities for a specified amount. (correct)

They cannot earn interest.

Which feature distinguishes demand deposits from other types of deposits?

They provide immediate access to funds. (correct)

They are required to be held for a fixed term.

They generally have lower liquidity.

They may not be accessed without prior notice.

How do banks generally treat funds in demand deposit accounts?

<p>They ensure safety of the money deposited.</p> Signup and view all the answers

What is one possible benefit of demand deposits compared to other forms of deposits?

<p>Unlimited withdrawals without penalties.</p> Signup and view all the answers

Study Notes

Demand Deposits

What are they? Deposits in a bank account that are payable on demand by the depositor.
Also known as: Current accounts.
Key Features:
- Withdrawals: Depositors can withdraw money at any time.
- Cheques: Depositors can use cheques to make payments.
- Interest: Some demand deposits, like savings accounts, earn interest.
- Safety: The money is safe and secure in the bank.

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Description

This quiz explores the concept of demand deposits, also known as current accounts. Learn about their key features, including how withdrawals work, the use of cheques, interest earnings, and the safety of these accounts. Test your knowledge on the essential aspects of demand deposits in banking.