Question

Distinguish Between.

Fixed deposit account and Savings account

Answer 1

Points	Fixed Deposit Account	Saving Account
1. Meaning	It is that account where a fixed sum of money is deposited for fixed period.	It is opened by individuals in order to save a part of their income.
2. Withdrawals	Customers cannot withdraw during the specified period.	Customers can withdraw either by cheques or withdrawal slips.
3. Documents	The bank gives a fixed deposits receipt to the customers.	The bank gives passbook, cheque book and pay-in-slip book to the customers.
4. Who takes it	It is suitable for any person with temporary idle cash.	It is suitable for fixed income group, wage or salary earners.
5. Restrictions	Amount becomes due on the expiry of the fixed period. If withdrawn earlier, then the interest rate will be less than applicable.	The customers have certain restrictions on withdrawals.
6. Interest Rate	Interest rate is higher. Longer the period, higher will be the rate.	Interest rate is low.
7. Nature of account	It is for fixed period of time except when the fixed deposit receipt is renewed.	It is of continuous nature.
8. Facilities	90% of the amount of fixed deposit can be given as loan.	No overdraft facility is given.