ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If money is deposited in a savings bank account, banks allow a lower rate of interest. Therefore, money is deposited in a fixed deposit account to earn interest at a higher rate. This type of deposit account allows the deposit to be made of an amount for a specified period.

Detailed explanation-2: -In Term Deposits, the sum of money is kept for a fixed maturity and the depositor is not allowed to withdraw this sum till the end of the maturity period. That is why they are called as Term Deposits because they are kept up to a particular term.

Detailed explanation-3: -A time deposit is an interest-bearing bank account that has a date of maturity, such as a certificate of deposit (CD). The money in a time deposit must be held for the fixed term to receive the interest in full. Typically, the longer the term, the higher the interest rate that the depositor receives.

Detailed explanation-4: -Scheduled Commercial Banks (SCBs) and All-India Financial Institutions are eligible to issue a CD. Cooperative Banks and RRBs cannot issue a CD. CDs issued by SCBs have in term period anywhere between 3 months to a year.

Detailed explanation-5: -Recurring deposit accounts can be opened for short, medium, or long terms, and the interest rate offered by the bank may vary depending on the term chosen. Banks offer different types of recurring deposits to individuals, children, senior citizens, and non-resident Indians (NRIs), with varying interest rates.