Question:
A deposit for a fixed period, in which money is deposited for a specific duration and interest on this deposit is payable at maturity and is taxable, is called :
A deposit for a fixed period, in which money is deposited for a specific duration and interest on this deposit is payable at maturity and is taxable, is called :
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Look for the words fixed period and interest at maturity. These point to a term deposit.
Updated On: Oct 19, 2026
- Recurring Deposit
- Fixed Deposit
- Savings Account
- Current Account
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The Correct Option is B
Solution and Explanation
Step 1: Understanding the Concept:
A bank offers several deposit schemes. They differ in how long the money stays, how it is deposited and when the interest is paid.
Step 2: Key Features in the Question:
The money is deposited for a fixed period.
A single lump sum is placed for a specific duration.
Interest is paid at maturity, and that interest is taxable.
These features describe a Fixed Deposit (FD), also called a term deposit.
Step 3: Check option (A).
A Recurring Deposit takes small fixed instalments every month for a set period. It is not one lump sum deposit. So (A) is wrong.
Step 4: Check option (B).
In a Fixed Deposit the customer places a lump sum for a fixed term. The bank pays interest, normally at maturity, at a rate fixed in advance. So (B) is correct.
Step 5: Check options (C) and (D).
A Savings Account has no fixed term. The customer can deposit and withdraw at any time. A Current Account is meant for traders and pays no interest. So (C) and (D) are wrong.
Final Answer:
The deposit described is a Fixed Deposit, which is option (B).
A bank offers several deposit schemes. They differ in how long the money stays, how it is deposited and when the interest is paid.
Step 2: Key Features in the Question:
The money is deposited for a fixed period.
A single lump sum is placed for a specific duration.
Interest is paid at maturity, and that interest is taxable.
These features describe a Fixed Deposit (FD), also called a term deposit.
Step 3: Check option (A).
A Recurring Deposit takes small fixed instalments every month for a set period. It is not one lump sum deposit. So (A) is wrong.
Step 4: Check option (B).
In a Fixed Deposit the customer places a lump sum for a fixed term. The bank pays interest, normally at maturity, at a rate fixed in advance. So (B) is correct.
Step 5: Check options (C) and (D).
A Savings Account has no fixed term. The customer can deposit and withdraw at any time. A Current Account is meant for traders and pays no interest. So (C) and (D) are wrong.
Final Answer:
The deposit described is a Fixed Deposit, which is option (B).
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