Question

Distinguish between currency and deposit money.

Answer 1

Basis	Currency	Deposit money
Definition	Currency notes refer to paper money.	Deposit money refers to the deposits held with the banks on the basis of which cheques could be drawn.
Issuer	In India, currency is issued by the Reserve Bank of India (RBI).	It is created when customers deposit money into bank accounts.
Nature	It is physical and tangible.	It exists in the form of bank records and can be used via cheques, cards, etc.
Intrinsic Value	Currency notes have very little intrinsic value.	Deposit money represents actual value deposited and is transferable.
Usage	Used directly for transactions.	It is used for transactions through banking instruments like cheques or transfers.
Liquidity	Most liquid form	Highly liquid, but requires bank access
Transferability	Hand-to-hand exchange.	Transfer through cheques, debit cards, and online methods.