Bank Transactions — Practice Quiz

Term Deposit Account

Term Deposit Account (Fixed Deposit) is opened for a fixed period and the deposit amount cannot be withdrawn before the expiry of the term. The term may be months or years, and higher interest rates are offered for longer terms. Savings and Current accounts allow withdrawals anytime, while RD allows premature closure with penalty.

Fixed Deposit Receipt

When opening a Term Deposit Account, the bank issues a Fixed Deposit Receipt as proof of the deposit. This receipt contains details like deposit amount, interest rate, maturity date, and terms. Passbooks are for savings accounts, cheque books for current/savings accounts, and pay-in-slip books for transaction accounts.

Manufacturing goods

Banks are financial institutions that deal with money and financial services, not manufacturing. They provide safe deposit lockers for valuables, foreign exchange services for currency conversion, and money transfer services. Manufacturing goods is a business activity outside the scope of banking services, which focus on financial transactions and related services.

Debtor and creditor

The primary relationship between banker and customer is debtor and creditor. When a customer deposits money, the bank becomes the debtor (owes money to customer) and customer becomes creditor. When bank lends money, roles reverse. This is a legal financial relationship, not personal (friend), employment-based (employer-employee), or commercial trading (buyer-seller) relationship.