Which type of deposits can be withdrawn immediately at the discretion of the depositor?

Which type of deposits can be withdrawn immediately at the discretion of the depositor?

• A. Savings deposits
• B. Time deposits
• C. Demand deposits
• D. Certificate of deposits

Answer: (C)

Demand deposits are the type of deposits that can be withdrawn immediately at the discretion of the depositor. They are typically held in checking accounts, allowing individuals to access their funds whenever they choose, without prior notice or penalties. This characteristic provides flexibility and liquidity to the depositor, making these funds readily available for transactions. In contrast, savings deposits offer a bit more limitation, often promoting savings over immediate access due to withdrawal restrictions or limited transfers. Time deposits and certificates of deposits require the depositor to commit their funds for a specific period; early withdrawal usually incurs penalties. Therefore, the immediate availability of funds is a key distinguishing feature of demand deposits.

Demand deposits are the type of deposits that can be withdrawn immediately at the discretion of the depositor. They are typically held in checking accounts, allowing individuals to access their funds whenever they choose, without prior notice or penalties. This characteristic provides flexibility and liquidity to the depositor, making these funds readily available for transactions.

In contrast, savings deposits offer a bit more limitation, often promoting savings over immediate access due to withdrawal restrictions or limited transfers. Time deposits and certificates of deposits require the depositor to commit their funds for a specific period; early withdrawal usually incurs penalties. Therefore, the immediate availability of funds is a key distinguishing feature of demand deposits.