Distinguish between Fixed deposits and Demand deposits.

1.	Distinguish between Fixed deposits and Demand deposits.
Answer» Fixed deposits: A lumpsum is deposited for a fixed time period. These deposits are repayable on the expiry of the stated period. Generally, the time period varies from three months to five years. The rate of interest on these deposits is higher than other deposits. Demand deposits: Demand deposits are deposits which can be withdrawn at any time by the account holder. Current account deposits are included in demand deposits. In this interest is not given to the account holder. There is no restriction on amount of withdrawal and number of withdrawal.

Answer»

Fixed deposits: A lumpsum is deposited for a fixed time period. These deposits are repayable on the expiry of the stated period. Generally, the time period varies from three months to five years. The rate of interest on these deposits is higher than other deposits.

Demand deposits: Demand deposits are deposits which can be withdrawn at any time by the account holder. Current account deposits are included in demand deposits. In this interest is not given to the account holder. There is no restriction on amount of withdrawal and number of withdrawal.

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