Why the demand deposits are considered as money?Explain.

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Ali Akbar

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Demand deposits are considered as money, because they can be withdrawn when required and the money withdrawn can be used for making payments. So, they are also considered as money in the modern economy.
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Online Teacher with over 30 Years Experience

Money is what money does and medium of exchange is the most important function of money. Demand deposits are also known as chequable deposits as they can be used on demand. They can also be used for making payments. That's why they can be considered as money.
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i) Demand deposits can be withdrawn from the bank whenever it is required.(ii) They are widely accepted as a means of payment, along with the currency, thus they aqre considered as money.(iii) They are accepted widely as means of payment by way of a cheque instead of cash
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