Demand Deposit accounts are whose deposit accounts which enables the account holder to withdraw money anytime based on the demand. As per the definition, demand deposit accounts provide more flexibility to the account holders in terms of withdrawing money whenever they want. Different types of deposit accounts are as follows:
Savings Account: This is the most popular demand deposit account which enables the account holders to save their surplus money and earn nominal interest rate on the same. Nowadays lots of extra services are being offered along with a savings account in order to attract more customers.
Negotiable Order of Withdrawal (NOW) Account: This is mainly available in USA which pays interest, on which Cheques may be written. These accounts are structured to comply with Regulation Q which prohibits interest payment on checking accounts.
Money Market Account: This is a special type of deposit account which has a relatively high interest rate but requires a higher minimum balance to be kept in the account to earn that higher interest rate. Failing to keep the higher minimum balance attracts monthly fees from the account holders. This is almost same as savings accounts but used to attract customers with high net worth.
Current Account: This is a deposit account where there are no restrictions on the number of times money can be withdrawn and also the bank does not pay any interest on the balance maintained in this account. This is also known as transaction account in US as it facilitates higher number of transactions for the respective account holders.