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Commercial Applications

Differentiate between current deposit account and fixed deposit account.

Banking

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Distinction between Current Deposit Account and Fixed Deposit Account

S.No.Basis of DistinctionCurrent Deposit AccountFixed Deposit Account
1.ObjectiveTo carry on day-to-day business dealings.To earn higher interest on lumpsum savings.
2.Account holdersMainly business firms.Individuals, businesses or any depositor.
3.Period of depositNo fixed period; can be operated continuously.Fixed period (e.g., 1, 3, 5 years); cannot be withdrawn before maturity.
4.Frequency of depositMoney can be deposited any number of times.Only one lumpsum deposit at the time of opening.
5.Number of withdrawalsNo restriction on number of withdrawals.Withdrawal allowed only on maturity date.
6.Cheque bookIssued.Not issued.
7.Pass bookIssued.Not issued; only Fixed Deposit Receipt is issued.
8.InterestNo interest paid; bank charges a small fee.Higher rate of interest paid.
9.Overdraft facilityAvailable.Not available.

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