Question

How many days can a fixed deposit amount be opened for a minimum period?
A) 3
B) 5
C) 7
D) 9

Answer 1

Hint:
Here, we have to use the Banking regulation act of Term deposits to find out the minimum period of time for which a fixed deposit amount can be opened. A term deposit is a fixed-term investment that includes the deposit of money into an account at a financial institution or Bank.

Complete step by step solution:
Banking is an industry that handles credit, cash, and other financial transactions. A term deposit is a fixed-term investment that includes the deposit of money into an account at a financial institution or Bank. Fixed Deposit (FD) is a financial instrument offered by banks and NBFCs (non-banking financial companies) that provides a safe and guaranteed return on your investment.
According to the act in Banking regulation, all the Fixed Deposit (FD) is locked for a particular period of time which can vary between 7 days and 10 years. The minimum amount accepted for a fixed/short deposit is Rs.1,000 for a period of 15 days and above and a minimum of Rs.100 lakh and above for a minimum period of 7 days.
Therefore, the minimum period of time for which a fixed deposit amount can be opened is 7 Days.

Hence, option C is correct.

Note:
Fixed Deposit offers investors better interest rates than the regular savings deposit until the given maturity date. Withdrawing a Fixed Deposit (FD) before maturity is known as breaking an FD. When we break the FD, we get a lower rate of interest and we also have to pay a penalty for the premature withdrawal or break of FD.