Question

Write the advantages and disadvantages of instalment schemes!Answer in 100+ words{Points : 50}Very much urgent!

Answer 1

You're Committed
A major disadvantage of an installment savings account is that you commit to put that much money into the account each month for a certain period of time. That reduces your flexibility with your monthly income. With ordinary savings, you can skip a month if things are tight. You can't do that with installment savings without paying a penalty or losing interest.
Your Money Is Tied Up
Another disadvantage of installment savings is that your money is tied up until the end of the agreed term. That can be one year or five. If you take out any money before the term ends, you'll pay a penalty. The amount of the penalty will vary with the specifics of your account, but often will be 90 to 180 days worth of interest.
There Are Advantages
An installment savings account can be good if you have trouble holding money aside to build up reserves. It can be better than a certificate of deposit, which has a fixed term like installment savings, because it doesn't require a big initial deposit and may pay more interest over an equal time period.





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