Question

Differentiate between demand deposits and fixed deposits. (Three points)

Answer 1

	Demand Deposits	Fixed Deposits
1.	Demand deposits are those that the bank holds and are payable on the depositor's demand.	Deposits kept by banks that must be repaid or withdrawn at the end of the term for which they were made are known as fixed deposits.
2.	Demand deposits are chequable.	Fixed deposits are not chequable.
3.	On these deposits, there is no interest given. Instead, depositors must pay the bank a fee in exchange for its services.	There is a high interest rate on these deposits.