Q.2 (A) (iv) Identify and explain the concept : Tushar deposited a lumpsum amount of ₹ 1,00,000 in the bank for a period of three years.
Best answer
Answer: Fixed deposit (time / term deposit)
Explanation: A fixed deposit is a deposit of a lump sum amount kept with a bank for a fixed period, such as three years. It cannot normally be withdrawn before maturity without penalty and it earns a higher rate of interest than a savings deposit. Accepting such deposits is a primary function of commercial banks.
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