What defines a demand deposit?

A demand deposit is defined as a bank account that allows depositors to withdraw their funds at any time without the need for advance notice. This characteristic makes demand deposits highly liquid, enabling account holders to access their money whenever needed, whether through checks, debit cards, or electronic transfers.

In contrast, other account types may impose limitations or requirements that distinguish them from demand deposits. For instance, fixed deposits typically require prior notice for withdrawals, while savings accounts may earn interest but restrict the number of transactions allowed. Additionally, accounts that permit unlimited transactions may come with associated fees, which is not the case for a standard demand deposit. Therefore, the defining feature of a demand deposit is its accessibility without withdrawal restrictions, making option B the correct choice.