Demand deposits are those that are made into checking accounts in order to meet the bank’s need for funds. This is often done in order to help ease the load on the bank’s coffers during a slow period or during a time of financial emergency.

Why are demand deposits liabilities?

Demand deposits are liabilities because they are backed by the deposited money.

Which type of deposits can be classified as demand deposits?

Demand deposits are deposits that are held by a bank for use in the future.

Is money in a checking account called a demand deposit?

Yes, checking accounts are commonly called demand deposits because you can withdraw cash from them as needed.

How do demand deposits act as money?

Demand deposits are used as money because they are accepted as a form of payment for goods and services. When a person wants to buy something, they deposit their demand deposit in a bank. The bank then uses the demand deposit as a form of currency to buy the good or service.

What is called demand deposit?

Demand deposit is a type of checking account that allows customers to hold money until they need it.