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Basis of
Difference
|
Current Account
|
Fixed Deposit Account
|
|
Meaning
|
It is that
account which is maintained by businessman and others who have regular
transaction.
|
It is that
account where a fixed sum of money is deposited for a fixed period.
|
|
Withdrawals
|
Customers
can withdraw money by cheques.
|
Customers
cannot with draw during the fixed period. If withdrawn earlier, rate of
interest will be less than applicable.
|
|
Facilities
|
The bank
gives a passbook, cheque book, statement of account and pay-in-slip book to
the customers.
|
The bank
gives a fixed deposit receipt to the customers
|
|
Who takes
it
|
It is
suitable for traders, businessmen, firms or institutions.
|
It is
suitable for any person with temporary idle cash.
|
|
Constraints
on operation and withdrawals
|
There are no
restrictions on the operation of a current account as long as there is
balance in the account.
|
Payment is
received only on expiry of the fixed period. If withdrawn earlier, rate of
interest will be less than applicable
|
|
Rate of
interest
|
Normally,
interest is not given.
|
Interest
rate is higher. Longer the period, higher will be the rate of interest.
|
|
Nature of
Account
|
It is of
continuous nature.
|
90% of
the amount of fixed deposit can be given as loan.
|
|
Facilities
|
Temporary
overdraft facility is given
|
It is for
fixed period of time except when the fixed deposits receipt renewed.
|
Current Account and Fixed Deposit Account
