Financial Awareness - Risk, Stability & Emerging Finance
Which type of bank deposit generally attracts a penalty if withdrawn before the maturity period?
Which type of bank deposit generally attracts a penalty if withdrawn before the maturity period?
medium Q14 of 15
Step-by-Step Solution
Step 1: Understand withdrawal rules
Time Deposits have a fixed tenure and impose penalties for premature withdrawal.Step 2: Evaluate options
Savings and Current Accounts allow flexible withdrawals. Overdraft is a credit facility. Fixed Deposit attracts penalty if withdrawn early.Final Answer:
Fixed Deposit → Option CQuick Check:
Premature withdrawal penalty = Fixed Deposit ✅
Quick Trick: Time Deposit + early withdrawal = Penalty
Common Mistakes:
- Confusing Fixed Deposit with Savings Account due to interest earning.
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