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Banking Deposits Related Interview Questions

  1. What do you understand by Banking?
    Ans: Banking means "acceptance of deposits from Public for the purpose of lending and investment".

  2. Who authorises banks to collect deposits?
    Ans: In pursuance of Banking Regulation Act (BRAct 1949), banks collect deposits.

  3. How many types of deposits are there in Banks?
    Ans: Basically two types. (i) Demand Deposits and (ii) Time Deposits.

  4. Is there any other type of classification from banks view point?
    Ans: Yes. It is low cost and high cost deposits.

  5. What do you understand by low cost deposits?
    Ans: This means banks will pay lesser interest or no interest on these deposits.

  6. What are CASA deposits?
    Ans: These are current Accounts and Savings Accounts (CASA).

  7. Will banks pay interest on current accounts?
    Ans: No, banks pay interest Only on savings accounts.

  8. Why interest is not paid on current accounts?
    Ans: For current account holders entire balance is to be kept at the disposal of customer. He can issue cheques/draw the amounts any number of times. No restrictions on withdrawals.

  9. Then why interest is paid on savings accounts?
    Ans: In respect of Savings accounts certain restrictions are there on withdrawals.

  10. What are the restrictions on Savings account?
    Ans: A customer can draw for a limited number of times. This varies from Bank to Bank. In general it is 30 debits for six months.

  11. Is there a minimum balance restriction on current and savings accounts?
    Ans: It is not a common rule. Some banks have taken away the restriction on minimum balance.

  12. What are the advantages to banks on CASA deposits?
    Ans: These are low cost deposits. Secondly core portion can be used by banks for short term lendings. Another advantage is these customers may avail other services also given by banks.

  13. Are there any other type of deposits where customers can get higher rate of interest?
    Ans: Yes, Time deposits. Which are kept at banks for pre-determined or specific time durations.

  14. How many types of deposit accounts are there?
    Ans: Fixed deposits, Recurring deposits.

  15. What are "NO Frills" accounts?
    Ans: No frills accounts are opened with zero balances.

  16. How do banks get money to pay interests on deposits?
    Ans: The money collected on deposits will be issued as loans to people with higher rate of interest. Banks arrange the credit structure to maximize their profits.

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