Fixed Deposit Account ↓
The main features of fixed deposit account are as follows:-
The main purpose of fixed deposit account is to enable the individuals to earn a higher rate of interest on their surplus funds (extra money).
The amount can be deposited only once. For further such deposits, separate accounts need to be opened.
The period of fixed deposits range between 15 days to 10 years.
A high interest rate is paid on fixed deposits. The rate of interest may vary as per amount, period and from bank to bank.
Withdrawals are not allowed. However, in case of emergency, banks allow to close the fixed account prior to maturity date. In such cases, the bank deducts 1% (deduction percentage many vary) from the interest payable as on that date.
The depositor is given a fixed deposit receipt, which depositor has to produce at the time of maturity. The deposit can be renewed for a further period.
squareAdvantages of Fixed Deposit Account ↓
The advantages of fixed deposit account are as follows:-
Fixed deposit encourages savings habit for a longer period of time..
Fixed deposit account enables the depositor to earn a high interest rate.
The depositor can get loan facility from the bank.
On maturity the amount can be used to make purchases of assets.
The bank can get the funds for a longer period of time.
The bank can lend such funds for short term loans to businessmen.
Fixed deposits indirectly boost economic development of the country.
The bank can also invest such funds in profitable areas.
squareBasic Articles On Banking ↓
Recurring Deposit Account - Meaning and Features
Current Bank Account - Features and Advantages
Saving Account Bank - Meaning, Features and Advantages
How to Open a Bank Account ? 7 easy steps To Open a Bank Account
What are the Main Advantages of Opening a Bank Account ?