Demand Deposit

What is a Demand Deposit?

A demand deposit is money deposited into the bank and can be withdrawn, immediately.

How it Works

Money that is deposited into a checking account is known as a demand deposit. 

Some or all of this money can be withdrawn immediately to pay bills etc. 

It is called a demand deposit to differentiate it from a term deposit

Like a demand deposit, a term deposit is money that belongs to the business. 

However, whereas a demand deposit can be withdrawn immediately, a term deposit can’t be withdrawn until the end of the term.