When banks accept a fixed sum of money from an individual for a definite term and pay on maturity with interest, the deposit is known as ________.

Term deposit

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Demand deposit

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Bond

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Mortgage

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Solution

The correct option is C Term deposit
The major functions of a bank are to mobilise deposits from the public and to invest and/or lend these deposits to individuals, firms and corporate institutions. Deposits are normally classified as demand deposits and time (term) deposits.
Term Deposits are investment deposits made for a predetermined period.
Demand Deposits are those from which depositors can withdraw part or full amount at any time without penalty or prior notice.

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