Question 22 of 37
Q.Distinguish between:
Demand deposit and Time deposit
Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2023Subjective· 2mImportance★★★★★
59% · 22/37 Questions
You're viewing a preview — the full solution, concept, methods & PYQ mapping are locked.
Start your 14-day free trial to unlock the full solution →Demand deposits are repayable on demand and carry little or no interest; time (term) deposits are locked in for a fixed maturity and carry higher interest. They differ in liquidity, interest and purpose.
Commercial banks accept the savings of the public in the form of deposits, and these deposits are broadly of two kinds distinguished by when the money can be taken out.
| Basis | Demand deposit | Time deposit |
|---|---|---|
| Meaning | Deposit repayable to the depositor on demand at any time | Deposit repayable only after a fixed period / maturity |
| Withdrawal | Anytime, without prior notice | Only after the agreed period (premature withdrawal attracts a penalty) |
| Rate of interest | Nil or very low | Comparatively high |
| Liquidity | Highly liquid | Less liquid |
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.