Distinguish Between Fixed Deposit and Current Account

1. Meaning ↓

In fixed deposit, a fixed sum of money is deposited for a fixed period.

Current account is operated by businessmen and others who have to do regular business transactions.

2. Purpose ↓

The main purpose of fixed deposit is to earn higher interest rate and get a lump sum amount on maturity.

The main purpose of current account is to facilitate regular transactions.

3. Who Operates?

Fixed deposit is operated by those individuals and organisations who have excess or surplus or idle money.

Current account is operated by businessmen and other organisations to facilitate their regular transactions.

4. Interest ↓

The interest paid on fixed deposit is high. At present it is about 10% p.a. for a one year deposit.

No interest is paid on current accounts.

5. Period ↓

Fixed deposit is maintained for a fixed period. It can be also further renewed.

The current account is of a continuous nature. It can be operated for any number of years.

6. Withdrawals ↓

On Fixed deposit, withdrawals are not allowed.

On Current account, there are no restrictions on withdrawals.

7. Overdraft facility ↓

The fixed deposit holders don't get overdraft facility.

Banks provides overdraft facility to the current account holders.

8. Bank Charges ↓

In case of fixed deposit, the bank does not charge for their services.

In case of Current account, the bank may charge a nominal amount for its services.

9. Cheque Book ↓

The fixed deposit holders do not get a cheque book. They get a fixed deposit receipt.

The current account holders get a cheque facility for withdrawals.