Balbharati solutions for Economics HSC 12th Standard Maharashtra State Board
CHAPTER: - 9 MONEY MARKET AND CAPITAL MARKET OF INDIA
Q.6. Distinguish between
2. Demand deposit and Time deposit.
Basic for comparison | 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 deposit is 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 deposit 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 withdrawal of funds as and when required by the account holder. | In case of time deposit, one does not need facilities like ATM, credit card, online banking as funds are tied for a specific period |
