Distinguish Between Saving Account and Fixed Deposit

1. Meaning ↓

Saving account is a bank account which is opened by persons in order to save a part of their income.

Fixed Deposit (FD) account is that type of account where a fixed sum of money is deposited for a fixed period.

2. Purpose for Depositors ↓

The main purpose of savings account is to save a part of the income.

The main purpose of fixed deposit account is to get a lump sum amount on the maturity of the deposit.

3. Who Operates?

Saving account is operated by individuals such as, salary earners, small traders and others.

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

4. Rate of Interest ↓

The saving account earns a nominal rate of interest. At present it is about 5% p.a. (in India).

The rate of interest is quite high. The longer the period of deposit, the higher is the rate of interest. At present it is about 10% p.a. (in India).

5. Period / Duration ↓

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

The amount can be kept for a fixed period, after which the amount is repaid to the depositor alongwith accrued Interest.

6. Minimum Amount ↓

The savings account can be operated with lesser amount.

To open a fixed deposit account more amount is required.

7. Withdrawals ↓

In case od saving account, withdrawals are allowed but are subject to certain restrictions.

In case of fixed deposit account, withdrawals are not permitted until the expiry of the fixed period.

8. Loan Facility ↓

The bank does not normally provide a loan facility to saving account holders.

The fixed deposit account holders can get a loan facility to the extent of 75% of the fixed deposit amount.

9. Pass Book and FD Receipt ↓

Bank provides a pass book, a cheque book and a pay-in-slip book to the saving account holders.

The bank gives a fixed deposit receipt to the FD account holders.

10. Frequency of Deposits ↓

In saving account, amount can be deposited for any number of times.

In fixed deposit account, amount is deposited once. However, it can be renewed.