Question

Explain the following type of bank account a. recurring deposit account
b. multiple deposit account

Answer 1

Answer:

(a).A recurring deposit is a special kind of term deposit offered by banks which help people with regular incomes to deposit a fixed amount every month into their recurring deposit account and earn interest at the rate applicable to fixed deposits. ... The rate of penalty will be fixed upfront.

(b).Multiple option deposit account is a combination of saving account and fixed deposit account. Different types of banking services are bank draft, banker's cheque, national electronic fund, real time grosssettlement,cash credit and bank overdraft.

Explanation:

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Answer 2

Recurring Deposit Account:A deposit bank account allowing the customers to deposit a fixed part of their income on a regular basis and earn interest.

Multiple Deposit Account:A type of savings account offered by the bank which mandates that a certain deposit amount higher than stipulated limit will automatically be transferred to the customer's fixed deposit account.

Explanation:

In Banking,recurring deposit account is an alternative to the regular savings account,in a sense that it encourages customers to save a certain part of their regular income level and earn interest payments on a periodic basis.Usually customers can deposit a fixed part of their monthly income on recurring account every month and the bank account will provide interest payments at the same rate as offered by most fixed deposit accounts.Therefore,it is an account which can be used for future purposes or as a safeguard during any financial emergency,which is similar to a fixed deposit account.

Multiple deposit account is an alternative type of savings account which allows the customers to deposit any amount but if it surpasses a certain stipulated limit then the excess deposit or fund will automatically be transferred to fixed deposit.The customer will earn interest payments from their fixed deposit account directly.A higher deposit from multiple account to fixed deposit account entails a higher interest payment as well.