Commercial Applications
Answer
Distinction between Current Deposit Account and Fixed Deposit Account
| S.No. | Basis of Distinction | Current Deposit Account | Fixed Deposit Account |
|---|---|---|---|
| 1. | Objective | To carry on day-to-day business dealings. | To earn higher interest on lumpsum savings. |
| 2. | Account holders | Mainly business firms. | Individuals, businesses or any depositor. |
| 3. | Period of deposit | No fixed period; can be operated continuously. | Fixed period (e.g., 1, 3, 5 years); cannot be withdrawn before maturity. |
| 4. | Frequency of deposit | Money can be deposited any number of times. | Only one lumpsum deposit at the time of opening. |
| 5. | Number of withdrawals | No restriction on number of withdrawals. | Withdrawal allowed only on maturity date. |
| 6. | Cheque book | Issued. | Not issued. |
| 7. | Pass book | Issued. | Not issued; only Fixed Deposit Receipt is issued. |
| 8. | Interest | No interest paid; bank charges a small fee. | Higher rate of interest paid. |
| 9. | Overdraft facility | Available. | Not available. |
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