Depositors are those who open an account and deposit money in the banks. Depositors can withdraw their money as and when they require therefore, these deposits are also called demand deposits. Demand deposits are accepted as a means of payment because the depositors get the facility of Cheque against it, which is used to settle the transaction without the use of money.
The benefits of deposits with the banks are:
- People have extra cash with them. Those having extra cash open a bank account in their name and deposit the surplus money there.
- Their money is safe with the banks.
- They get some interest on the amount they have deposited.