Question

Bank pays interest on

• A. Deposits
• B. Loans
• C. Both (A) and (B)
• D. None of these

Hint:

Interest paid is an expense for banks on deposits, not loans.

Answer 1

The Correct Option is A

Step 1:
Banks pay interest to depositors on the money they save with the bank.
Step 2:
Banks charge interest on loans, but they do not pay interest to borrowers; instead, they receive it.
Step 3:
Therefore, the correct option is (A) Deposits.