Different types of deposit of commercial banks.
Receiving of deposit is one of the primary functions of a commercial bank. Banks usually accept deposits from those people who can save and cannot profitably use their surpluses. There are three types of deposits like:
I. Fixed deposit: Fixed deposit refers to a type of deposit which can be drawn on the expiry of a specific period. This type of deposits are paid at a higher rate of interest.
II. Current deposit: Current deposit refers to a type of deposit which can be drawn at any time and in any amount. Generally current deposits are not paid any rate of interest. However, a very low rate of interest is paid if there is a condition that deposit amount will never fall a certain limit.
III. Savings Bank deposit: These deposits encourage savings among the people. These deposits carry comparatively higher rate of interest but it is lower than fixed deposits.