Demand vs Time Liabilities: Definitions and Key Differences
Demand Liabilities
Demand Liabilities are Bank Deposits payable on demand. Typical Demand Liabilities of a bank include:
- 9% Balance in the Savings Accounts ( As per Bangladesh Bank Order: 9% balance in the Savings Accounts should be treated as Demand Liability, and 91% balance in Savings Accounts should be treated as Time Liability)
- Balance in the Current Deposit Accounts
- Credit Balance of Cash Credit Accounts
- Overdue Fixed Deposit Accounts
- Unclaimed Balance Accounts
- Interest Accrued in the Accounts mentioned above
- Payment Orders
- Outstanding Bills
- Telegraphic Transfers
- Outstanding Drafts
- Demand Drafts
- Hajj Deposit Accounts
- Margin on L/C
- Margin on Guarantee
- Sundry Deposit Account and
- Any other Deposit Account Payable on Demand.
Time Liabilities
Time Liabilities are Bank Deposits with a fixed maturity and payable after a certain period. Time Liabilities Include:
- 91% balance in the Savings Account
- Fixed Deposit Receipt Accounts
- Short Notice Deposit Accounts
- Deposit Pension Scheme (DPS) Accounts
- Interest accrued on all the accounts mentioned above
- Employees Provident Fund
Differences between Demand Liabilities & Time Liabilities
| Topic | Demand Liabilities | Time Liabilities |
| Definition | Demand Liabilities are bank deposits which are payable on demand | Time Liabilities are bank deposits which are payable after a certain period of time |
| Notice Period | Usually no notice period is required for withdrawal | Notice period is required for withdrawal |
| Rate of Interest | Rate of interest is lower | Rate of interest is higher |
| Purpose | People deposits money to perform transactions | People deposit money for saving. |
