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Question
Distinguish between demand deposits and fixed deposits.
Solution
Differences between demand deposits and fixed deposits:
| Demand deposits | Fixed deposit |
| The interest rate on demand deposits is very low. | Fixed deposits carry a higher interest rate. |
| Demand deposits can be withdrawn at any time. | Fixed deposits can be withdrawn only after the expiry of a specific period. |
| Demand deposits are chequable, i.e. they can be withdrawn through cheques. | Fixed deposits are not chequable. |
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Concept of Credit Creation
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