Question

Statement (1): Fixed deposits carry high rates of interest.

Statement (2): Saving account can be operated only upto a specified fixed period of time.

Options

• Both statements are true.

• Both statements are false.

• Statement 1 is true but Statement 2 is false.

• Statement 2 is true but Statement 1 is false.

Answer 1

Statement 1 is true but Statement 2 is false.

Explanation:

• Statement (1): Fixed deposits, often known as time deposits, secure an investor's money for a set period of time. In exchange for surrendering instant liquidity, banks offer depositors higher interest rates than ordinary savings or current accounts.
• Statement (2): A savings account is a type of continuous demand deposit account. It has no maturity date and can be used continuously as long as the account is active. Fixed deposits are those that are only valid for a specific period of time.