How Demand Deposits Work
If depositors were required to notify their banks in advance before withdrawing funds, it would be quite a challenge to obtain cash or make mundane transactions. Demand deposit accounts (DDAs) are intended to provide ready money—the funds' people need to make a purchase or pay bills. The account's holdings can be accessed at any time, without prior notice to the institution. The account holder simply walks up to the teller or the ATM—or, increasingly, goes online—and withdraws the sum they need; as long as the account has that amount, the institution has to give it to them. The money is available "on-demand"—hence, the name "demand deposit" for this sort of account.
Demand deposit accounts, which typically are offered by banks and credit unions, are in contrast to investment accounts offered by brokerages and financial services firms. While the funds may be invested in highly liquid assets, the account holder still must notify the institution that they wish to withdraw money; depending on the asset in question, it may take a day or two for the investments to be sold and the cash to be available.
"DDA" can also mean direct debit authorization, which is a withdrawal from an account for purchasing a good or service. It's what happens when you use a debit card. But it's fundamentally the same concept: The money is immediately available, drawn on the linked account, for your use.