Definition

1. Noun:
   • A bank deposit from which withdrawals can be made without notice: A "demand deposit" is a type of bank account, such as a checking account, where the deposited funds are available for immediate withdrawal by the account holder. The bank is required to honor withdrawal requests on demand, without requiring prior notice or imposing a waiting period.

Usage Examples

• Noun:
  • Most checking accounts are considered demand deposits.
  • The company keeps its operating cash in a demand deposit for easy access.
  • Interest rates on demand deposits are typically lower than on time deposits.

Advanced Usage

• Legal and Financial Context: In banking regulations, "demand deposit" formally refers to funds that are payable immediately and form a core part of the money supply (M1).
  • The central bank's policy affects the reserves banks must hold against demand deposits.

Variants and Related Words

• Time Deposit (n): The opposite of a demand deposit; a bank deposit that has a fixed term and typically pays a higher interest rate, with penalties for early withdrawal.
• Checking Account (n): A common type of demand deposit account.
• Current Account (n, chiefly British): Equivalent to a checking account/demand deposit.

Synonyms

• Checking account (common usage equivalent)
• Sight deposit (a less common synonym in some financial contexts)

Related Phrases

• On demand: This phrase is intrinsic to the definition, meaning "whenever requested."
  • The funds are payable on demand.
• Demand deposit account (DDA): The full technical term.
  • Please provide your demand deposit account number for the wire transfer.

Noun

1. a bank deposit from which withdrawals can be made without notice