Question

In which of the following does the time period is fixed at the time of opening the account?
A.Savings account
B.Current account
C.Fixed deposit account
D.Recurring deposit account

Answer 1

Hint: In banking the term period is fixed or variable depending on the conditions one agrees at the time of opening of the account. Bank accounts are open at the bank with a different lock up period of the amount deposited. Here we will go through the given multiple choices terms and will decide the correct answer.

Complete step-by-step answer:
Savings Account – A savings account can be defined as the bank account at the retail bank which includes the requirements with the only limited number of withdrawals to take place. Savings account has the potential to earn interest.
Current account – A current account can be defined as the personal bank account in which money can be withdrawn at any time using cheque book or cash card.
Fixed deposit account – A fixed deposit account can be defined as the investment instrument which banks and non-banking financial companies offer to their customers. The time period is fixed and is pre-determined at the time of opening of the account.
Recurring deposit account – Recurring deposit is the special kind of the term deposit offered by the banks which helps people to deposit regular incomes at a fixed interval that is every month and earn an interest rate applicable for it.
Hence, from the given multiple choices – the option C is the correct answer.
So, the correct answer is “Option C”.

Note: Know the difference between the accounts and the financial instruments to get the solution and justification for this type of questions. Remember interest is the payment from the borrower or the deposit taking financial institution to the lender or the depositor based on the amount and repayment of it above the amount.