Demand deposits are among the most volatile and least predictable of a bank's sources of funds with the shortest potential maturity.

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Demand deposits refer to deposits that can be withdrawn by the depositor at any time without prior notice. They are considered volatile and unpredictable because depositors can withdraw funds in large amounts or all at once, which can affect a bank's liquidity and ability to meet its obligations. Additionally, demand deposits have the shortest potential maturity as they can be withdrawn by the depositor on demand.

Demand Deposits Are Among the Most Volatile and Least Predictable