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Question
With reference to business finance, explain the following:
Public Deposits
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Solution
- A company can accept deposits from the public to finance its medium and short-term requirements of funds.
- The companies always prefer to accept public deposits for meeting their financial needs rather than approaching banks or other financial bodies.
- Companies generally receive public deposits for different periods ranging from 6 months to 5 years.
- The rate of interest on the deposits varies from 10 percent per annum to 12 percent per annum depending upon the period of deposits and the reputation and standing of the company.
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RELATED QUESTIONS
Draft a Letter to the depositor informing him/her about payment of interest.
Write a word, term, or phrase that can substitute for
the following statement:
The authority which has power to accept deposits.
State, with reasons, whether the following statements are True
or False (Any THREE) :
A company can accept deposits repayable on demand.
Write notes on (Any Three)
Repayment of Deposits.
Multiple Choice Question:
Public deposits are deposits that are raised directly from
State the merits and demerits of public deposits and retained earnings as methods of business finance.
Public deposits are deposits made by the public in nationalised banks.
A public deposit is a deposit made by public in the nationalised banks.
Explain the pros and cons of public deposits as a source of business finance.
Public deposits are a source of long-term finance.
