Demand Deposits
The primary business of the early merchant banks was promotion of trade. The new class of commercial banks made accepting deposits and issuing loans their principal activity. They lend the money they received on deposit. They created additional money in the form of new bank notes. The money they created was partially backed by gold, silver or other assets and partially backed only by public trust in the institutions that created it.
Demand deposits are funds that are deposited in bank accounts and are available for withdrawal at the discretion of the depositor. The withdrawal of funds from the account does not require contacting or making any type of prior arrangements with the bank or credit union. As long as the account balance is sufficient to cover the amount of the withdrawal, and the withdrawal takes place in accordance with procedures set in place by the financial institution, the funds may be withdrawn on demand
Read more about this topic: History Of Money
Famous quotes containing the words demand and/or deposits:
“In our daily intercourse with men, our nobler faculties are dormant and suffered to rust. None will pay us the compliment to expect nobleness from us. Though we have gold to give, they demand only copper.”
—Henry David Thoreau (1817–1862)
“Were all the worshippers of the gold calf to memorialize me and request a restoration of the deposits I would cut my right hand from my body before I would do such an act. The gold calf may be worshipped by others but as for myself I serve the Lord.”
—Andrew Jackson (1767–1845)