Banking Practice Showdown 2025 – Vault into Your Future Success!

Demand deposits are funds held in an account from which deposited money can be withdrawn at any time without any advance notice. This type of account is typically offered by banks and credit unions, allowing customers easy access to their money. The characteristic feature of demand deposits is their liquidity; account holders can make withdrawals through checks, ATMs, or electronic transfers without facing penalties or restrictions on the timing of the withdrawal.

In contrast, term loans require borrowers to repay the principal amount plus interest over a specified period and usually do not allow for withdrawal of the funds once they are disbursed. Revolving credit lines do allow for repeated borrowing and repayment, but they involve a credit limit and require a commitment to repay borrowed amounts over time. Mortgages are long-term loans secured by real estate, also with fixed repayment terms and restrictions on withdrawal. Each of these other options lacks the immediate accessibility and liquidity that characterize demand deposits.