Question

What is the money in the form of currency and checkable deposits in commercial banks called?.

Answer 1

Demand Deposits

Step-by-step explanation:

Demand Deposits, as the name implies, are ones that are not placed for a certain length of time, unlike fixed deposit receipts, etc. Businessmen usually regard the money they place in current accounts as demand deposits that they can withdraw at any moment. Savings bank accounts and fixed deposit accounts are the additional deposit options available to a depositor. The depositor deposits his funds into a savings bank account and can withdraw them as needed. Some banks place limits on the number of withdrawals that may be made from savings bank accounts in a month or a year, but all banks pay interest on the money that is kept in savings bank accounts, whereas no interest is given on demand deposits. In a fixed deposit account, funds are placed for a preset amount of time, such as one month, three months, six months, or one year or more, and interest is given on those funds at a predefined rate that was set on the deposit date.

Basically there are 2 types of demand deposits:

1. Current accounts are typically created by businesspeople for their commercial dealings. No interest is paid on the balance in the account. flexible withdrawal and deposit options.
2. Savings account - Usually opened by working class people, students, etc. Interest is earned on the balance in the account at a rate of 3.5–4%. Flexible withdrawal and deposit options.

There are 2 types of term deposits.

1. Deposits that may be made repeatedly are known as recurring deposits ( like monthly, quarterly). This money must be retained for a specific amount of time and is only withdrawable at maturity. More than savings accounts, but less than fixed deposits, is the interest earned.
2. Money may only be put once in a fixed deposit. This money will be held for a specific amount of time and may only be released at maturity. All account types will provide the highest rate of interest. If you wish to take money out before it matures, there will be a penalty.

These are the basic types of bank accounts. Today's banks enhance these accounts with additional features to make them more enticing and personalized.