What type of deposit can be withdrawn at any time?

What type of deposit can be withdrawn at any time?

• A. Time deposit
• B. Demand deposit
• C. Fixed deposit
• D. Notice deposit

Answer: (B)

A demand deposit is a type of deposit that can be withdrawn at any time without any advance notice. This characteristic differentiates it from other types of deposits like time deposits and fixed deposits, which typically require the funds to be held for a specified period before they can be withdrawn without penalty. Demand deposits are commonly associated with checking accounts, where account holders have immediate access to their funds to make withdrawals or payments whenever needed. This makes demand deposits a highly liquid form of money, providing flexibility and convenience to the account holder. In contrast, time deposits and fixed deposits are designed to be held for a set time period, often offering higher interest rates but restricting access to the funds until maturation. A notice deposit falls somewhere in between, requiring advance notice for withdrawal, thus limiting immediate access to funds.

A demand deposit is a type of deposit that can be withdrawn at any time without any advance notice. This characteristic differentiates it from other types of deposits like time deposits and fixed deposits, which typically require the funds to be held for a specified period before they can be withdrawn without penalty. Demand deposits are commonly associated with checking accounts, where account holders have immediate access to their funds to make withdrawals or payments whenever needed. This makes demand deposits a highly liquid form of money, providing flexibility and convenience to the account holder.

In contrast, time deposits and fixed deposits are designed to be held for a set time period, often offering higher interest rates but restricting access to the funds until maturation. A notice deposit falls somewhere in between, requiring advance notice for withdrawal, thus limiting immediate access to funds.