Demand deposits are a type of bank account where the deposited funds can be withdrawn on demand at any time without any prior notice. These deposits are mobilized by commercial banks from their customers. Some key features of demand deposits are:

• Liquidity: Demand deposits are highly liquid and can be accessed right away, making them a practical choice for handling daily transactions and expenses.

• Secure storage of money: Depositors can feel secure knowing that their money is protected by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to a specified level.

• Easy access to money: Demand deposits provide easy access to money, which is crucial in emergency situations.

Banks accept demand deposits and also pay an interest rate on the deposits, making it a safe place for people to save their money and earn interest. The demand and supply of demand deposits can be controlled by the Reserve Bank of India. Demand deposits are different from term deposits, which require depositors to wait for a predetermined period before making a withdrawal. Checking accounts are one of the most common types of demand deposits, and they offer the greatest liquidity, allowing cash to be withdrawn at any time.