What is the minimum and maximum
periods for which deposits can be
issued:
A. 6, 36 months
B.610,20 months
C.
15, 30 months
D.
24,48 months
Answers
Answer:
The minimum tenure for a bank deposit varies depending on the type of investor. For retail individuals including senior citizens the minimum tenure for a bank fixed deposit is 15 days. The maximum period for which a bank deposit can be kept is for 20 years.
Answer:
The one thing that happens when you place an amount for such a large duration is that you lock interest rates for the period. Let's give you an example.
Say, if you place a deposit on March 19, 2015 for a period of 20 years at 8.5% interest rate. What happens if interest rates rise after 2 years and becomes 9.5%. You lose 1%.
But, there is a major benefit as well. After some years if the interest rate falls to 6%, you would benefit. In short locking money for large periods places you at a risk of rising and falling interest rates.