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Which statement correctly differentiates a Savings Account from a Fixed Deposit (FD)?

easy Q1 of 15
Banking Awareness - Types Of Bank Accounts
Which statement correctly differentiates a Savings Account from a Fixed Deposit (FD)?
ASavings accounts allow withdrawals on demand, while FDs are locked for a fixed period
BSavings accounts are only for businesses
CFDs earn no interest
DSavings accounts have fixed tenure
Step-by-Step Solution

  1. Step 1: Identify liquidity feature.

    Savings accounts permit withdrawals anytime.

  2. Step 2: Compare with FD rules.

    FDs are locked for a predefined tenure.

  3. Final Answer:

    Savings accounts allow withdrawals on demand, while FDs are locked for a fixed period → Option A

  4. Quick Check:

    On-demand vs locked funds = Savings vs FD ✅
Quick Trick: Anytime withdrawal = Savings; locked money = FD.
Common Mistakes:
  • Thinking both accounts have similar liquidity.
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