Final answer:
A broker in North Carolina is required to maintain a demand deposit in a federally insured depository institution, which encompasses commercial banks, savings and loan associations, and credit unions. These institutions accept deposits and allow for withdrawals or check writing, which are essential services for a broker.
Step-by-step explanation:
In North Carolina, a broker is required to have a demand deposit account in a federally insured depository institution. This kind of institution includes various entities such as commercial banks, savings and loan associations, and credit unions. Each of these institutions is capable of accepting and holding deposits, which are also known as demand deposits, and offering check-writing capabilities for those funds, which meet the criteria laid out for brokers in North Carolina.
A demand deposit is a type of checkable deposit that allows the holder to withdraw funds or write a check without prior approval from the financial institution. By diversifying across a wide range of loans and investments, depository institutions like commercial banks, savings and loans, and credit unions, can mitigate risk.
Demand deposit accounts are crucial as they offer liquidity and convenience for businesses and individuals to manage their daily financial transactions and expenses efficiently.