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Questions and Answers
Which of the following accounts offers the advantage of earning higher interest compared to Fixed Deposit accounts?
Which of the following accounts offers the advantage of earning higher interest compared to Fixed Deposit accounts?
Cash credit is a long-term loan primarily used for personal expenses.
Cash credit is a long-term loan primarily used for personal expenses.
False (B)
Which type of deposit account offers the highest interest rate?
Which type of deposit account offers the highest interest rate?
Current accounts typically offer interest payments to depositors.
Current accounts typically offer interest payments to depositors.
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What is the main purpose of a Cash Credit account?
What is the main purpose of a Cash Credit account?
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What is the primary purpose of a recurring deposit account?
What is the primary purpose of a recurring deposit account?
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In a Multi Option Deposit Account, deposits exceeding a specific limit are automatically transferred into a ______ account.
In a Multi Option Deposit Account, deposits exceeding a specific limit are automatically transferred into a ______ account.
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Match the following account types with their primary characteristics:
Match the following account types with their primary characteristics:
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The money deposited in a Fixed Deposit account is also known as a ______ of the bank.
The money deposited in a Fixed Deposit account is also known as a ______ of the bank.
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Match the deposit account type with its primary characteristic:
Match the deposit account type with its primary characteristic:
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Study Notes
Banking Services
- Banking is accepting deposits for lending and investment, and money is repayable
- Primary Functions: Accepting deposits (fixed/time, current/demand, savings, recurring, multiple option) and lending money (loans, cash credit, overdrafts, discounting bills of exchange)
- Secondary Functions: Agency services (general functions, utility functions)
Types of Accounts
- Fixed Deposit/Time Deposit Account: Money deposited for a fixed period, earning interest. Refunds are given after a discount if withdrawn early
- Current Account: Business accounts allowing multiple deposits and withdrawals on demand. No interest is offered, but fees might be charged
- Savings Account: Encourages small savings with withdrawals and deposits. Interest rate is lower compared to fixed deposits
- Recurring Deposit Account: Regular monthly deposits for a fixed term, earning higher interest than savings.
Other Banking Services
- Cash Credit: Short-term business loans, allowing withdrawals against security
- Overdraft: Allowing withdrawals exceeding deposited amount, for trustworthy customers, often secured by assets
- Bank Draft/Demand Draft: Instruments for remitting funds from one place to another
- Electronic Banking (E-banking): Internet-based banking services, lowering transaction costs and empowering customers. Includes digital payments, such as Debit/Credit cards, UPI, AEPS, BHIM, Mobile Wallets, and POS systems. Other services like registered post, parcel service, speed post and courier, are also postal services.
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Description
This quiz covers the essential functions of banking services, including types of accounts and their features. Learn about fixed deposits, current accounts, savings accounts, and recurring deposit accounts, along with the primary and secondary functions of banks. Test your knowledge of these financial concepts.
