Merits of public Deposits:
1. These deposits take care of short-term and medium-term financial requirements.
2. These deposits do not involve the creation of any charge on any asset of the borrower.
Demerits of public Deposits:
1. Collection of deposits form a large number of depositors is somewhat difficult.
2. New companies generally find it difficult to borrow funds through public deposits.
Merits of retained earnings:
1. Retained profits reduce the dependence of company on external borrowings.
2. The Society stand to benefit from the stability accorded to industrial sector by retained earnings.
Demerits of retained earnings:
1. Ploughing-back of profits is possible only when there is stability in earnings.
2. Retained earings may lead to over-capitalisation, which is not good for a concern.