BANKING AFFAIRS

Detailed explanation-1: -They are repayable after an agreed time period but it can be requested and payable on demand. There would be some penalty for the same.

Detailed explanation-2: -In Fixed Deposit, an amount is deposited for a fixed period of time. A fixed deposit provides interest on the deposited amount. Whereas, in Recurring Deposits, the customer deposits fixed amounts in small intervals for a long period. The main purpose of a RD is to develop the habit of saving on a regular basis.

Detailed explanation-3: -Fixed deposits are repayable on a prefixed maturity date. The amount repayable is: The principal amount and Agreed interest rate for the period. No operations are allowed to the customer against the deposit, as is permitted in demand deposits.

Detailed explanation-4: -An account in which money is deposited for a fixed period of time is known as a Fixed Deposit account. After the expiry of the specified period, the person can claim his money from the bank. Usually, the rate of interest is higher in a fixed deposit as compared to the savings account.

Detailed explanation-5: -The interest amount earned at the end of maturity of a Fixed Deposit is higher than the interest earned on an RD. The interest amount earned is lesser than the interest earned on an FD. The interest earned on an RD is paid on maturity along with the capital amount.