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Questions
Distinguish between :
Current deposits and Fixed deposits.
Differentiate between current deposits and fixed deposits.
Distinguish Between
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Solution
| Sr. No. | Basis | Current Deposits | Fixed Deposits |
| 1. | Target Audience | Mainly opened by businessmen, firms, and companies for daily business transactions. | Opened by individuals and households to invest their long-term savings. |
| 2. | Time Period | No fixed maturity period; it is a continuous, active account. | Opened for a fixed, pre-determined period (ranging from 7 days to 10 years). |
| 3. | Interest Rate | Zero interest is paid on these accounts (some banks even charge a maintenance fee). | Offers a high rate of interest that increases with the duration of the deposit. |
| 4. | Withdrawal Limits | No restrictions on withdrawals; users can transact any number of times daily. | Money cannot be withdrawn before maturity without facing a penalty fee. |
| 5. | Nature of Account | Also known as a Demand Deposit because funds are payable instantly on demand. | Also known as a Time Deposit because funds are locked in for a specific duration. |
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