A demand deposit is a type of bank account from which deposited funds can be withdrawn at any time, without advance notice. Demand deposits are also known as checkbook money and are considered part of the narrowly defined money supply of a country. They are the most common type of bank account and are offered by most banks and credit unions. Here are some key points to keep in mind:

• Accessibility: Funds in a demand deposit account are highly liquid and can be withdrawn at any time without paying a penalty. This makes them ideal for holding emergency savings, paying bills, writing checks, and making debit card purchases.

• Interest: Demand deposit accounts may pay interest on the deposited funds, although the rate is often minimal to modest.

• Types: Demand deposit accounts include checking accounts, savings accounts, and money market accounts. Checking accounts are the most popular type of demand deposit account because they offer the greatest liquidity, allowing cash to be withdrawn at any time.

• Difference from term deposits: Demand deposits are different from term deposits, which require depositors to wait for a predetermined period before accessing their funds.

• Regulation: Under Regulation D guidelines, banks may charge a small fee for going over a set number of withdrawals in a month.

Overall, demand deposits are important in consumer spending, as they hold the funds used to pay for everyday expenses.