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Commercial Applications

Differentiate between :

(a) Savings Deposit and Current Deposit.

(b) Fixed Deposit and Recurring Deposit.

Banking

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Answer

(a) Distinction between Savings Deposit and Current Deposit

S.No.Basis of DistinctionSavings DepositCurrent Deposit
1.ObjectiveTo develop habit of saving among the public.To carry on day-to-day business dealings.
2.Account holdersMainly individuals, especially middle and low-income people.Mainly business firms and traders.
3.Number of withdrawalsRestriction on number of withdrawals in a week.No restriction on number of withdrawals.
4.InterestLow rate of interest is paid.No interest is paid; bank charges a small fee.
5.Overdraft facilityNot available.Available.
6.Cheque bookIssued.Issued.

(b) Distinction between Fixed Deposit and Recurring Deposit

S.No.Basis of DistinctionFixed DepositRecurring Deposit
1.ObjectiveTo earn higher interest on lumpsum savings.To save regularly each month and earn interest.
2.Frequency of depositsOnly one lumpsum deposit.Fixed regular monthly deposits.
3.PeriodFixed period (e.g., 1, 3, 5 years).Fixed period (12 to 72 months).
4.Rate of interestHigher rate.Moderate rate.
5.Cheque bookNot issued.Not issued.
6.Document issuedFixed Deposit Receipt is issued.Pass book is issued.
7.WithdrawalOnly on maturity date.Only on maturity date.

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