ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What Is a Demand Deposit? A demand deposit account (DDA) is a bank account from which deposited funds can be withdrawn at any time, without advance notice. DDA accounts can pay interest on the deposited funds but aren’t required to. Checking accounts and savings accounts are common types of DDAs.

Detailed explanation-2: -A demand deposit account is just a different term for a checking account. The difference between a demand deposit account (or checking account) and a negotiable order of withdrawal account is the amount of notice you need to give to the bank or credit union before making a withdrawal.

Detailed explanation-3: -A checking account is also called a demand deposit account because the account holder may withdraw money on demand or write checks on the account at any time.

Detailed explanation-4: -The deposits in the bank accounts can be withdrawn on demand, so these deposits are called demand deposits. Banks accept the deposits and also pay an interest rate on the deposits. In this way, people’s money is safe with the banks and it earns interest.