Multiple choice

When a customer having fixed deposits with a bank needs urgent money, he should be advised

  1. to close the deposit before the due date

  2. to obtain a loan against the deposit upto the limit allowed

  3. to part withdrawal or use flexi deposit facility

  4. to wait till the due date as fixed deposit cannot be closed before the due date
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

When a customer needs urgent money but has fixed deposits, closing before maturity causes interest penalty. The best option is to take a loan against the fixed deposit, which allows the customer to access funds while the deposit continues to earn interest (though loan interest is usually charged at a slightly higher rate than deposit rate).

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