Meaning: -Public deposits are an important source of financing short term requirement of company. Companies generally receive public deposits for the period ranging from 6 months to 36 months.
Advantages of Accepting Deposits:
1. The rate of interest payable on deposits is lower than the rate of interest on loan.
2. The deposit does not create charge on the assets of the company.
3. It is a simple method of financing as it has very few legal complications and formalities to be fulfilled.
4. Deposits holders are the creditors of the company. Company can collect huge amount of money without interference of deposit holders in the management of it.