Difference between Demand Liabilities and Time Liabilities of Banks

Demand liabilities are the deposits received by banks which they have to pay when demanded by the depositors. For example, Current and Savings Bank Account Deposits, Demand Drafts (FD) and Deposits held as security for advances which are payable on demand.

Time liabilities are the deposits banks receive that they have to pay after a specific time period. These include Fixed Deposits (FD), Cash Certificates, Cumulative and Recurring Deposits, Gold Deposits, etc.

Why are deposits called liabilities of a bank?

Deposits received by banks are considered as liabilities to the banks because they have to pay back them in the future.

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