Distinguish between demand deposits and time deposits.

Question

Demand depositTime depositTime PeriodThere is no fixed time period involved in the case of a demand deposit.Time deposit...

Accepted Answer

Demand depositTime depositTime PeriodThere is no fixed time period involved in the case of a demand deposit.Time deposit...

	Demand deposit	Time deposit
Time Period	There is no fixed time period involved in the case of a demand deposit.	Time deposits are deposited in the bank for a fixed period of time (usually 1 year to 5 years).
Example	Saving accounts and current accounts are examples of demand deposits.	Fixed or term deposits are an example of time deposits.
Rate of Interest	In the case of saving and current accounts, it is lower (which is around 4 to 6 percent).	The rate of interest offered by the banks on time deposits is higher around 7 to 9 percent.
Facilities	In case of demand deposits, one needs all facilities like ATM, credit card, the online banking as these accounts are meant for the withdrawal of funds as and when required by the account holder.	In the case of time deposits, one does not need facilities like ATMs, credit cards, the online banking as funds are tied for a specific period.