Current Account and Fixed Deposit Account.
Solution:
Current Account | Fixed Deposit Account |
1. Meaning: It is that account which is maintained by businessman and others who have regular bank transactions. | It is that account where a fixed sum of money is deposited for a fixed period. |
2. Withdrawals: Customers can withdraw money by cheques. |
Customers cannot withdraw during the specified period. |
3. Documentation: The bank gives a passbook, cheque book, statement of account, and pay-in-slip book to the customers. |
The bank gives a fixed deposit receipt to the customers. |
4. Who takes it: It is suitable for traders, businessmen, firms, or institutions. |
It is suitable for any person with temporarily idle cash. |
5. Restrictions: There are no restrictions on the operation of a current account as long as there is balance in the account. |
The amount becomes due on the expiry of the fixed period. If withdrawn earlier, then the rate of interest will be less than applicable. |
6. Interest rate: Normally interest is not given |
The interest rate is higher, longer the period, the higher will be the rate of interest. |
7. Nature of Account: It is of continuous Nature |
It is for a fixed period of time except when the fixed deposit receipt is renewed. |
8. Facilities: A temporary overdraw facility is given |
90% of the amount of fixed deposit can be given as loan. |
