Question : ___________ is an account that offers a higher rate of interest but has restrictions on withdrawals.
Option 1: Savings account
Option 2: Current account
Option 3: Fixed deposit account
Option 4: Recurring deposit account
Correct Answer: Fixed deposit account
Solution : The correct answer is (c) Fixed deposit account.
A fixed deposit account, also known as a time deposit or term deposit, is an account offered by banks where customers deposit a specific amount of money for a fixed period of time at a predetermined interest rate. These accounts typically offer a higher rate of interest compared to regular savings accounts.
However, fixed deposit accounts come with restrictions on withdrawals. The deposited amount is locked for a specified period, known as the term or maturity period, which can range from a few months to several years. During this period, withdrawals may be restricted or subject to penalties if made before the maturity date.
