Bank Deposits Quiz: 10 Questions with Explanations

The bank owes the deposit balance to the customer, so it is a liability for the bank. The same deposit is an amount receivable for the depositor.

A current account is transaction-oriented and commonly used for business receipts and payments. Service charges, balance requirements and other conditions depend on the bank.

Savings and current accounts are demand deposits. Fixed and recurring deposits are term deposits, even where premature withdrawal is available under conditions.

An RD builds savings through regular instalments. A standard FD instead starts with a lump sum for an agreed period. Monthly RD contributions do not all remain invested for the same duration.

An FD places a principal sum for a chosen tenure. The rate, compounding and payout arrangement determine its interest treatment; the question does not assume a specific market rate.

Classification is based on the deposit arrangement, not simply the availability of early closure. Premature withdrawal can change the interest payable or involve a penalty under the product terms.

DICGC covers eligible deposits at insured banks, subject to its rules and ceiling. Mutual funds are investments and are not protected by this bank-deposit insurance.

Eligible balances in the same right and capacity are combined across the bank’s branches and account types. Opening another account at the same bank does not create another insurance ceiling.

The ceiling applies to principal and interest combined, not principal plus a separate allowance for interest. Coverage is subject to the same-right-and-capacity rules and other eligibility conditions.

Savings accounts support personal saving and access under account terms. They are not identical products across all banks, so learners should distinguish the core account concept from bank-specific pricing.