Q. Which of the following statements is true? A. Banks cannot accept demand and time deposits from public B. Banks can accept only demand deposits from public C. Banks can accept demand and time deposits only from government D. Banks can accept both demand and time deposits from public

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Answer: D. Banks can accept both demand and time deposits from public

Let us first understand the time and demand deposits.

Time deposits are the sum of money banks accept for a fixed term (say, for 1 year, 3 years or 5 years.) and can be withdrawn only after the term expires or at the end of the maturity. Examples are Fixed deposits, term deposits.

Demand deposits are the sum of money bank accept but can be withdrawn at any time or as per the demand of the depositor. Examples are Savings account and Current account.

Bank accepts deposit of both type from the public.

Learn more: 

  1. Time Deposit
  2. Demand deposits
  3. What is the difference between deposits and demand deposits?

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