Distinguish between the following.

1) Current Account and Savings Account
Ans:- 

Sr.

No.

Points

Current Account

Savings Account

1)

Meaning

Current Account is that account

which is opened by businessman and others who have regular banking transactions.

Savings Account is that account which is opened by individuals in order to save a part of their income.

2)

Withdrawals

Depositors or Customers can withdraw money from bank by cheques.

Depositors or Customers can

withdraw money from bank either by cheques or by Withdrawal Slip.

3)

Facilities

The bank gives a Passbook, Cheque book, Statement of account and pay-in-slip book to the Current Account holder.

The bank gives a Passbook, Chequebook, and pay-in-slip book to the Saving Account holder.

4)

Rate of Interest

Normally, interest is not given on Current Account or it may be given at a nominal rate.

The rate of interest is higher than Current Account.

5)

Overdraft facility

Overdraft facility  is given to Current Account holder.

No Overdraft facility is given to Savings Account holder.

6)

Suitability

It is suitable for traders, businessmen, firms and institutions.

It is suitable for salary earners and fixed income group.



2) Loan and Overdraft
Ans:- 

Sr.

No.

Points

Loan

Overdraft

1)

Meaning

It is an arrangement under which a certain amount is advanced for a certain fixed period.

It is an arrangement under which the current account holder is allowed to overdraw in excess of the balance from Current Account.

2)

Eligibility

Any account holder i.e. Current, Savings, Fixed, Recurring can get a Loan.

Only Current account holders can get overdraft facility.

3)

Duration

It is for long period.

It is for short period.

4)

Purpose

The Purpose is to meet long term requirements.

The Purpose is to meet short term working capital requirements.

5)

Repayment

Amount of Loan with interest is to be repaid in installments or in lump sum on the due date.

Amount of overdraft is adjusted against the balance of deposits in the current account.

6)

Security

Some valuable assets are to be given as security.

Overdraft is sanctioned against hypothecation of stock, pledge of Fixed Deposit Receipts.



3) Fixed Deposit and Recurring Deposit
Ans:- 

Sr.

No.

Points

Fixed Deposit Account

Recurring Deposit Account

1)

Meaning

Fixed Deposit Account is that

account where a fixed sum of money is deposited for a fixed period.

Recurring Deposit Account is

that account where depositors can regularly deposit fixed amount for a specific period.

2)

Facilities

The bank gives a Fixed Deposit Receipt to the Depositor.

The bank gives a Pass book and Pay-in-Slip book.

3)

Rate of Interest

Interest rate is higher. Longer the period, higher will be the rate of interest.

The rate of interest is higher than Savings Account but less than Fixed Deposit Account.

4)

Suitability

It is suitable for any person with surplus income.

It is suitable for fixed income group.