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Question

Which of the following statements are True about various types of Deposits?

I- Demand deposits can be withdrawn at the wish of the depositor as they do not carry any term.

II- Time deposits usually carry higher rate of interest as they are locked in for a stipulated period.

III- Demand deposits are shown on the liability side of Bank’s balance sheet whereas Time deposits are shows as Assets.

A Only I Correct Answer Incorrect Answer
B Only II Correct Answer Incorrect Answer
C I & II Correct Answer Incorrect Answer
D II & III Correct Answer Incorrect Answer
E all of the above Correct Answer Incorrect Answer

Solution

A time deposit is a fixed-term investment that includes the deposit of money into an account at a financial institution. Time deposit investments usually carry short-term maturities ranging from one month to a few years and will have varying levels of required minimum deposits. All kinds of deposits are liabilities for the bank.

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