Question

A sum of money not required at the moment can be deposited in __​

Answer 1

Explanation:

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Answer 2

QUESTION:-

A sum of money not required at the moment can be deposited in __

ANSWER:-

• A sum of money not required at the moment can be deposited in Fixed Deposit Accounts

• Fixed Deposit Accounts is the answer

EXPLANATION:-

• Fixed Deposit Accounts: Money in these accounts is deposited for a fixed period like 6 months, one year, two years, five years or more. These deposits cannot be paid on demand.

• They do not enjoy cheque facilities, that is cheques cannot be handed out against these deposits for the payments. These deposits are also known as time deposits as the money deposited in them cannot be withdrawn before the maturity of the period for which the deposit is made.

• For instance, if a person has deposited money in this account for 2 years, legally and technically, he cannot withdraw the money before the expiry of the 2 years. In practice, however, banks allow the depositors to withdraw funds from such deposits even before the maturity period, provided the depositors are willing to lose a part of the interest.

• Banks may also allow the depositors to borrow funds against the fixed deposits as security at a normal lending rate. These deposits are made by persons who have surplus funds to spare for some time and are reluctant to undertake any risk. Moreover, the banks can safely lend this money since they know that these deposits will not be normally withdrawn before the expiry of a specific period.

• Fixed deposits are also known as interest-earning deposits. The interest on these deposits is higher than on saving deposits.

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