Types of deposit accounts
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Principles and Practices of Banking — JAIIB.
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What is a demand deposit?
A demand deposit is a bank deposit that can be withdrawn by the depositor at any time without prior notice, such as a current account or savings account.
What is a current account primarily used for?
High-frequency business transactions with no withdrawal limits.
Which type of deposit account is most suitable for businesses with frequent transactions?
Current accounts are most suitable for businesses as they allow unlimited withdrawals and deposits without restrictions on the number of transactions.
What is the minimum balance typically required in a savings bank account?
It varies by bank; RBI has deregulated minimum balance requirements.
Do current accounts earn interest in India?
As per RBI guidelines, scheduled commercial banks are not permitted to pay interest on current accounts, though certain exceptions apply to specific government accounts.
What is an overdraft facility in a current account?
Allowing withdrawals beyond credit balance up to a sanctioned limit.
What is a savings bank account primarily designed for?
A savings bank account is designed to encourage the habit of saving among individuals and small entities, offering moderate interest while allowing limited withdrawals.
What is a 'Former or Survivor' mandate in a joint account?
Only the first-named holder operates; survivor gets balance on death.
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