How do demand deposits have the essential features of money? Explain.

Cheques against demand deposits can be used to directly settle payments without the need for cash.
A cheque is a piece of paper instructing the bank to pay a sum from the payer’s account to the person to whom the cheque has been issued.
Payers must have an account with the bank to issue cheques against demand deposits.
Demand deposits, like currency, are widely accepted as a means of payment.
These characteristics lend demand deposits the essential characteristics of money, or a medium of exchange.

Remember it with a Visual Mnemonic

Now let’s remember this lesson with the help of a visual mnemonic. A visual mnemonic is a picture that has cues to remind you the points in the lesson. The mnemonic for this lesson is provided below. Remember to scroll the picture gallery using the arrow on the right.