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A demand deposit is money deposited into the bank and can be withdrawn, immediately.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Some or all of this money can be withdrawn immediately to pay bills etc.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However, whereas a demand deposit can be withdrawn immediately, a term deposit can’t be withdrawn until the end of the term.