When individuals begin to learn of the many advantages of offshore or international banking, it is natural to want to establish a personal account and begin reaping the benefits. However, the wide range of account types can sometimes be overwhelming, leading people to select accounts that aren’t suited to their lifestyles or their financial needs. Often, a demand deposit account is the perfect fit.
To determine this for yourself, learn more about what a demand deposit account is, how it can be used and how it has the potential to benefit account holders.
What is a Demand Deposit Account?
In the most basic definition, a demand deposit account is just as the name suggests: An account where you can demand to withdraw any amount instantly. In a lot of ways, a demand deposit account is just like a checking account. You deposit money into the account periodically, and then you withdraw amounts when you need access to it.
However, there are some variations differentiating a demand deposit account from a checking account. To start, both accounts may have limitation on how quickly money can be withdrawn. When you write a check, for example, it could take a few business days to clear.
Another name for a demand deposit account is a NOW account, which speaks to the immediate nature and urgency of this particular type of banking account.
How To Use a Demand Deposit Account
A demand deposit account works as a vehicle for your deposits. These deposits can be automatic transfers from your place of work, or they could be checks from employers, vendors or family members. Whether the deposit is physical cash, a check or an electronic transfer, the money will go straight to the balance of your demand deposit account. Similarly, you can access the balance in a number of ways. If the account is connected to a debit or credit card, you can shop and spend as normal.
Alternatively, you can write and cash checks, pay bills online or make online transfers. Clearly, having online banking services in conjunction with a demand deposit account will increase its value and utility in a number of ways.
Benefits of a Demand Deposit Account
The primary benefit of a demand deposit account is that your assets held within it are available on demand. There is typically no waiting period to access your money, or the waiting period is very short and just a couple of days.
Having immediate access to your liquid assets can give you peace of mind that if you ever need money, it is ready and available for you at a moment’s notice.
Ideal Candidates for a Demand Deposit Account
So many different types of people can benefit from a demand deposit account. If you ever write checks, or you’re just beginning to explore the potential of diversification with an offshore bank account, then a demand deposit account is ideal.
If you travel abroad often, or you’re planning to buy a second home overseas, then a demand deposit account can come in handy more than any other banking option.
Once you learn more about the demand deposit account, it becomes obvious that it is a smart, popular choice for investors, retirees and small business owners around the world.