Banks cannot accept interest-free deposits other than in

BANKING GENERAL KNOWLEDGE

Please wait while the activity loads.
If this activity does not load, try refreshing your browser. Also, this page requires javascript. Please visit using a browser with javascript enabled.

If loading fails, click here to try again

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Saving Account
B	Recurring Deposit Account
C	Fixed Deposit Account
D	Current Account

Explanation:

Detailed explanation-1: -Notes: Banks cannot accept interest free deposits other than in current account.

Detailed explanation-2: -On the Current account, the bank does not pay any interest. Current Account is mainly used for business purpose. There is no restrictions on number and amount of withdrawal in a current account. Q.

Detailed explanation-3: -No, banks do not pay any interests to current account holders. Why? Because current accounts are heavily operated accounts which are mainly held by businesses, merchants and enterprises for large and frequent transactions. Due to this, banks incur a huge operational cost for current accounts.

Detailed explanation-4: -Banks use the major portion of deposits to extend loans. These loans are then recovered with an interest. Banks charge a higher interest for credit than deposits. Hence, the amount they receive is greater than the amount that they lend.

There is 1 question to complete.