Higher rate of interest are paid on ________ deposits.

saving deposit

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fixed deposit

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current account

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recurring

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Solution

The correct option is B fixed deposit
Fixed deposit account is a type of account where a fixed sum of money is deposit for a fixed period of time with no withdrawals permitted until the expiry of this fixed period. The rate of interest is quite high in fixed deposit account as the deposits are accumulated in large numbers in the bank only for a fixed period of time without any withdrawals. Moreover, the rate of interest earned on fixed deposits is directly proportional to the sum of money deposited in the account. Therefore, if the sum of money deposited is more, the rate of interest will also be more and if the sum of money deposited is less, the rate of interest will also be less.

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