Podcast
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?
- Savings Account
- Cash Credit Account
- Recurring Deposit Account (correct)
- Multi Option Deposit Account
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?
- Recurring Deposit account
- Savings Deposit account
- Current account
- Fixed Deposit account (correct)
Current accounts typically offer interest payments to depositors.
Current accounts typically offer interest payments to depositors.
What is the main purpose of a Cash Credit account?
What is the main purpose of a Cash Credit account?
What is the primary purpose of a recurring deposit account?
What is the primary purpose of a recurring deposit account?
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.
Match the following account types with their primary characteristics:
Match the following account types with their primary characteristics:
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.
Match the deposit account type with its primary characteristic:
Match the deposit account type with its primary characteristic:
Flashcards
Banking
Banking
Accepting deposits for lending and investment, repayable on demand.
Fixed Deposit
Fixed Deposit
Money deposited for a fixed term, earning maximum interest.
Current Account
Current Account
Account for businesses, allows unlimited deposits and withdrawals, earns no interest.
Savings Deposit Account
Savings Deposit Account
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Recurring Deposit
Recurring Deposit
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Recurring Deposit Account
Recurring Deposit Account
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Multi Option Deposit Account
Multi Option Deposit Account
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Cash Credit
Cash Credit
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Time Liability
Time Liability
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Auto-Sweep Facility
Auto-Sweep Facility
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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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