• Demand deposits are those deposits where the money deposited is available to the
depositor on demand.
• There are two types of demand deposit accounts. These are:
• Current Accounts. This is defined by the Reserve Bank as “a form of demand deposit
wherefrom withdrawals are allowed any number of times depending upon the balance in
the account or upto a particular agreed amount and shall also be deemed to include other
deposit accounts that are neither savings deposit or term deposit.”
• Savings Accounts. A savings account has been defined as “ a deposit account …..which
is subject to the restrictions as to the number of withdrawals as also the amounts of
withdrawals permitted by the bank during any specified period.”
• Call Deposits. These are deposits maintained by banks. These are kept overnight or for a
period of time and are interest earning.
• Fixed Deposit. A fixed or time deposit is defined as “a deposit received by a bank for a
fixed period and which is withdrawable only after the expiry of the said fixed period and
shall also include deposits such as recurring, cumulative, annuity, reinvestment deposits,
cash certificates and so on.”
The manner these accounts operate and their differences are detailed in the ensuing
OPENING OF DEPOSIT ACCOUNTS
• By opening a deposit account, an individual who has no other account with the bank,
begins a relationship. The beginning of a relationship imposes several obligations on a
banker. He must therefore be careful regarding whose accounts he opens.
• An account can be opened by anyone who can enter into a valid contract. Minors may
open an account jointly with their guardians. Bankers may allow minors to open savings
accounts in their single name and operate the account. These will be savings accounts and
minors will not be permitted to overdraw these accounts. This is to inculcate banking
Who places their funds in deposit accounts?
• Deposits are opened by those who have funds in hand. These incl