This time we will discuss the definition of demand deposit and the types, characteristics and processes of demand deposit. Here’s the explanation …
Table of contents :
Definition of cash flow
Types and Examples of Cash Payment
- Check
- Giro
- Credit Card
- Postal Money Orders
- Billets
The characteristics of cash flow
The process of cash flow
Pros and Cons of Cash Money
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Definition of cash flow
In general, cash flow is money issued by Commercial Banks in the form of securities and can be used as a legal payment instrument.
There is also a definition of demand deposits (savings in banks) as money that is deposited in bank accounts at various commercial banks and can be used to carry out legal payment transactions using intermediary media such as checks, current accounts, billets, or order payments within a certain period of time.
Unlike currency , this type of money cannot be used to conduct daily transactions freely. However, for some people the use of money is considered more practical and safer than currency.
Types and Examples of Cash Payment
definition of demand deposit
This type of money can be in the form of securities, codes or electronic devices issued by commercial banks. Examples of current accounts are as follows:
- Check
Checks which are securities in the form of a written order from the account holder to the designated Bank to pay a sum of money.
- Giro
Demand deposits, namely deposits at a bank where withdrawals can be made at any time by using checks or other securities, or bookkeeping.
- Credit Card
Credit cards are cards issued by commercial banks that can be used by users to make transactions without having to pay cash. Credit card holders must pay transactions to the credit card issuing bank.
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- Postal Money Orders
A postal money order is a deposit at the Bank in the form of postal mail that can be used to send money.
- Billets
Bilyet, namely forms, records, and other written evidence that can prove transactions, containing information or orders to pay.
The characteristics of cash flow
There are several characteristics that distinguish this type of money from other types of money. These characteristics are as follows:
This type of money can be issued by financial institutions or commercial banks.
This type of money is issued in the form of securities, codes or electronic devices issued by commercial banks.
Although it can be used as a legal payment instrument, the public is not obliged to accept and use this money.
The use of this type of money is only guaranteed by the financial institution or commercial bank that issued it.
This type of money cannot be used to make daily transactions in the general public.
The process of cash flow
Most transactions in various countries have used this type of money because it is considered more practical and safer. The following is the current account deposit process:
Primary Deposit : a money deposit process in which a customer deposits his currency to the Bank to be recorded in his bank account as a deposit at the Bank.
Loan Deposit: a deposit in a bank that occurs when a customer borrows money from a bank, where the money is not withdrawn into the currency, but still remains in his bank account.
Quasi Money: the process of depositing at the Bank when a customer deposits money in the Bank in the form of time deposits, certificates of deposit, or savings.
Pros and Cons of Cash Money
The use of this type of money has its own advantages and disadvantages. The advantages and disadvantages of current accounts are as follows:
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- Pros
Its use is more practical because you don’t need to carry cash.
Unlimited money can be received.
The use of this money tends to be safer and more practical because of the risk of losing less money.
When the checking is lost, the owner can track or block it by reporting it to the bank concerned.
The number of fractions of this type of money can be determined as needed.
The process of moving large amounts of money can be done at very minimal costs.
- Disadvantages
This type of money is not effective if it is used to make transactions of small value.
This type of money cannot be accepted by everyone in making transactions.
