In deposit terminology, the term Demand Deposit refers to a type of account held at banks and financial institutions that may be withdrawn at any time by the customer. The majority of such Demand Deposit accounts are checking and savings accounts.
For example, a Demand Deposit was once thought applicable only to checking accounts. Nevertheless, because of the immediate availability of funds deposited in savings accounts and money market accounts, these are now often also considered Demand Deposits. Demand Deposits now often comprise a major component of a nation’s money supply because of the immediate ability of Demand Deposits to be available to purchase goods and services and to satisfy the payment of debts. In the United States, a bank or financial institution must by law make Demand Deposits available to its customers within a set period of time and the financial institution must advise its customers in writing of this policy.