Question

A bank offers the following options to its customers:

1. Fixed Deposit Account: 7% interest, withdrawal only after maturity.
2. Savings Account: 4% interest, withdrawal anytime.
3. Recurring Deposit Account: 6% interest, regular monthly deposits.

Which account type should a customer choose if they need to withdraw money regularly and also want to maximize interest?

Options

• Fixed Deposit Account

• Savings Account

• Recurring Deposit Account

• None of the above

Answer 1

Savings Account

Explanation:

A Savings Account is the only suitable option because it clearly allows for withdrawals at any time, meeting the customer’s primary need for frequent access to funds. While Fixed Deposits and Recurring Deposits provide greater interest rates, they lock funds until maturity, making them incompatible with the demand for frequent, unrestricted withdrawals.