In monetary analysis only a two-fold classification of bank deposits into (a) demand deposits or demand liabilities and (b) time deposits or time liabilities are made.
a) Demand deposits or Demand Liabilities:
A demand deposit is money deposited into a bank account with funds that can be withdrawn on demand at any time. The depositor will typically use demand deposit funds to pay for everyday expenses. For funds in the account, the bank or financial institution may pay either a low or zero interest rate on the deposit.
The maximum a person may withdraw can be up to a certain daily limit or up to the limit of their account balance. Common examples of demand deposits would be amounts in a checking account or savings account. Note that demand deposits are different from term deposits. Term deposits require depositors to wait a predetermined period before making a withdrawal.
Demand deposits include current deposits, the demand liabilities portion of savings bank deposits margins held against letters of credit/guarantees, unclaimed deposits, credit balances in the cash credit account, deposits held as security for advances that are payable on demand, and balances in past-due fixed deposits, cash certificates, and cumulative/recurring deposits.
b) Time deposits or time Liabilities:
Time Liabilities of a bank are those which are payable otherwise than on demand. The liabilities that banks have to pay after a specific time period. Fixed deposits, cash certificates, cumulative and recurring deposits, time liabilities portion of savings bank deposits, staff security deposits, margin held against letters of credit if not payable on demand, deposits held as securities for advances which are not payable on demand, and Gold Deposits come under Time Liabilities.