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Why do banks encourage recurring deposit accounts?

hard Q9 of 15
Banking Awareness - Types Of Bank Accounts
Why do banks encourage recurring deposit accounts?
AThey help mobilise small but steady deposits
BThey allow unlimited withdrawals
CThey provide instant credit
DThey reduce customer base
Step-by-Step Solution

  1. Step 1: Look at bank’s perspective.

    Banks value steady inflow of funds.

  2. Step 2: Match with RD benefit.

    RD brings regular small deposits.

  3. Final Answer:

    They help mobilise small but steady deposits → Option A

  4. Quick Check:

    Regular inflow = stability for banks ✅
Quick Trick: RD gives banks steady monthly funds.
Common Mistakes:
  • Thinking RD is mainly for withdrawal convenience.
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