Write notes on each of the following:
(a) Savings account
(b) Current account
(c) Fixed deposit account.
Explanation
(a)Savings account; is the most common form of bank account. It encourages the low income earners to form or develop the habit of saving. This type of account is operated with the use of passbook. Owners are paid interest for keeping their money in the bank but if withdrawals are more than twice in a month it may not attract interest.
(b) Current account; is the type of account that is operated with the use of cheque books. Money can be withdrawn as soon as the need for it arises. This type of account is usually operated by businessmen, organisations etc. This type of account does not attract any interest but rather-the owner pays the bank some economic charges. The owners can also apply for overdraft and loan.
(c) Fixed deposit account; is the type of account that is usually operated by individuals and organisations who have excess liquidity. They put part of the excess liquidity in the fixed or time deposit account for a specified period of time. Owners of this type of account usually receive higher interests rates than savings account depositors.