What Is a Demand Deposit?
A demand deposit is money that is deposited into a bank account that can be withdrawn at any time from the bank without fees or waiting periods. Determine whether deposited money will need to be available before putting it into an account that is not a demand account with advice from a financial consultant in this free video on money management and bank accounts.
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Do you think you need cash today from your bank? Well, when you go to make a deposit there, you want to be sure to tell them that you need this to be a demand deposit. What that means is you can get that money any time. You can walk in today or tomorrow at any moment or use your debit card at any moment and get that cash out. Hi, this is Roger Groh of Groh Asset Management, and today, we're here to talk about demand deposits -- what they are and how you can use them, and the differences between different types of accounts. For instance, if you were to open up a bank account and you didn't think that you were going to need that money for a longer time period, you may very well want to sign up for a money market account. On the other hand, you may not be able to immediately withdraw your money out of a money market account. If your bank...if your banker is any good, they're probably going to try and sell you a certificate of deposit. Frankly, they make commissions on it. And on the other hand, you may not be able to immediately get at the cash in a CD. So you have to think carefully about when you're going to need your money and how much of it you might need. And then lastly, put whatever you might need at any moment into a demand account. Now, because that money is liquid at any moment, the rate of interest that you get on that money might very well be less than you would get in a certificate of deposit or a money market account. That's the negative part to it. So if you think you're going to be needing your cash at any time, be sure and tell your banker to make this into a demand deposit, which means that that cash will be available to you upon your demand. I'm Roger Groh with Groh Asset, and thank you very much for spending time with me.