1. What Is A Demand Deposit Account
2. Demand Deposit Account Meaning
3. Demand Deposit Account Definition
4. Demand Deposit Accounts Definition Economics

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Demand deposits or non-confidential money are funds held in demand accounts in commercial banks.^[1] These account balances are usually considered money and form the greater part of the narrowly defined money supply of a country.^[2] Simply put, these are deposits in the bank that can be withdrawn on demand, without any prior notice.

History[edit]

In the United States, demand deposits arose following the 1865 tax of 10% on the issuance of state bank notes; see history of banking in the USA.

In the U.S., demand deposits only refer to funds held in checking accounts (or cheque offering accounts) other than NOW accounts; however, in a 1970s and 1980s response to the 1933 promulgation of Regulation Q in the U.S., demand deposits in some cases came to allow easier access to funds from other types of accounts (e.g. savings accounts and money market accounts). For the historical basis of the distinction between demand deposits and NOW accounts in the U.S., see Negotiable order of withdrawal account#History.

Money supply[edit]

Demand deposits are usually considered part of the narrowly defined money supply, as they can be used, via checks and drafts, as a means of payment for goods and services and to settle debts. The money supply of a country is usually defined to consist of currency plus demand deposits. In most countries, demand deposits account for a majority of the money supply.^[2]

During times of financial crisis, bank customers will withdraw their funds in cash, leading to a drop in demand deposits and a shrinking of the money supply. Economists have speculated that this effect contributed to the severity of the Great Depression.^[3]

This did not happen, however, in the financial crisis that began in 2008. In fact, demand deposits in the U.S. increased dramatically, from around $310bn in August 2008 to a peak of around $460bn in December 2008.^[4]

See also[edit]

References[edit]

1. ^'Bank Money: Merriam-Webster Dictionary'. www.merriam-webster.com. Retrieved 19 August 2009.
2. ^ ^abKrugman, Paul R., and Robin Wells. Economics. New York: Worth, 2006. Print.
3. ^Friedman, Milton (1 November 1971). Monetary History of the United States, 1867-1960. Princeton University Press. ISBN0-691-00354-8.
4. ^'Federal Reserve Bank statistics'. www.federalreserve.gov. Retrieved 18 March 2010.

What Is A Demand Deposit Account

DDA is a term usually used in finance that is an abbreviation for “Demand Deposit Account”. This is a type of a checking account where the account holder can withdraw their funds “on demand”, or anytime. Oftentimes, employers like to use these types of accounts to deposit their employees’ salary.

DDA Debit Charge

In this case, DDA means “Direct Debit Authorization“. This term is usually used in USAA bank accounts.

The DDA Debit Charge is sometimes referred to as DDA Purchase or DDA Pur. It is the status of a charge that is still “pending” on your account. Once the transaction fully goes through, the name will be updated to reflect the actual charge.

It is best to check if you have any automatic payments set for that specific amount, because in most cases, it is a pre-approved transaction that is still processing.

How Demand Deposit Account Differs from Other Bank Account Types

Some individuals would go to the bank and open up a Money Market Account. This other type of bank account cannot be withdrawn whenever you want. A DDA, on the other hand, is always available for withdrawal at any time.

• A Demand Deposit Account has lesser interest compared to other types of bank accounts.
• If you are depositing to a bank and you think you might need it in the near future, tell your bank to open a DDA.
• DDAs can be accessed using checks, debit cards, and other electronic methods.

What is DDA Credit?

Demand Deposit Account Meaning

Sometimes, accounts would have a negative balance or a lot of overdraft transactions. This occurrence is called DDA credit and often results to the account being closed. Most banks would automatically close accounts with DDA Credits when the negative balance is not settled within 30 days.

Demand Deposit Account Definition

Some terms to take note of:

• Overdraft – When an account has greater amount of withdrawals than what was actually deposited
• Charge off – When the bank assumes that the debt or overdraft cannot be collected or paid

Foreign Currency Accounts

Demand Deposit Accounts Definition Economics

The same concepts as above apply if you withdraw or deposit money with a forex broker. The charge is initially displayed as a DDA charge, and then it should be updated to include the appropriate broker name.