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TOTAL QUESTION: 30
TOTAL TIME= 30 MIN
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Your results are here!! for" Fixed Deposit (FD) "
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Question 1 of 30
1. Question
What is a Fixed Deposit (FD)?
Correct
An FD is a deposit account in which a customer deposits a lump sum for a fixed tenure at a predetermined interest rate.
Incorrect
An FD is a deposit account in which a customer deposits a lump sum for a fixed tenure at a predetermined interest rate.
Unattempted
An FD is a deposit account in which a customer deposits a lump sum for a fixed tenure at a predetermined interest rate.
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Question 2 of 30
2. Question
Why are Fixed Deposits generally considered to have low liquidity?
Correct
FD money is generally locked until maturity and premature withdrawal may attract a penalty.
Incorrect
FD money is generally locked until maturity and premature withdrawal may attract a penalty.
Unattempted
FD money is generally locked until maturity and premature withdrawal may attract a penalty.
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Question 3 of 30
3. Question
Why do Fixed Deposits generally offer higher interest rates than regular savings accounts?
Correct
The passage attributes the higher rate to the lack of liquidity.
Incorrect
The passage attributes the higher rate to the lack of liquidity.
Unattempted
The passage attributes the higher rate to the lack of liquidity.
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Question 4 of 30
4. Question
What is a Fixed Deposit called in Canada, Australia, and New Zealand?
Correct
The passage states that it is known as a Term Deposit or Time Deposit in these countries.
Incorrect
The passage states that it is known as a Term Deposit or Time Deposit in these countries.
Unattempted
The passage states that it is known as a Term Deposit or Time Deposit in these countries.
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Question 5 of 30
5. Question
What is a Fixed Deposit called in the United Kingdom according to the passage?
Correct
In the United Kingdom, it is called a Bond.
Incorrect
In the United Kingdom, it is called a Bond.
Unattempted
In the United Kingdom, it is called a Bond.
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Question 6 of 30
6. Question
Which formula is used to calculate simple interest on an FD?
Correct
The stated simple interest formula is SI = P × R × T / 100.
Incorrect
The stated simple interest formula is SI = P × R × T / 100.
Unattempted
The stated simple interest formula is SI = P × R × T / 100.
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Question 7 of 30
7. Question
In the simple interest FD formula, what does P represent?
Correct
P represents the principal amount or initial deposit.
Incorrect
P represents the principal amount or initial deposit.
Unattempted
P represents the principal amount or initial deposit.
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Question 8 of 30
8. Question
How is the maturity amount calculated when simple interest is used?
Correct
The maturity amount is calculated as A = P + SI.
Incorrect
The maturity amount is calculated as A = P + SI.
Unattempted
The maturity amount is calculated as A = P + SI.
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Question 9 of 30
9. Question
Which formula is given for compound interest on an FD?
Correct
The passage gives CI = P × (1 + R/100)^T − P.
Incorrect
The passage gives CI = P × (1 + R/100)^T − P.
Unattempted
The passage gives CI = P × (1 + R/100)^T − P.
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Question 10 of 30
10. Question
Which formula is given for the maturity amount of a compound-interest FD?
Correct
The stated formula is A = P × (1 + R/100)^T.
Incorrect
The stated formula is A = P × (1 + R/100)^T.
Unattempted
The stated formula is A = P × (1 + R/100)^T.
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Question 11 of 30
11. Question
What is the typical tenure range of an FD mentioned in the passage?
Correct
The passage states that FD tenure can range from as short as 7 days to as long as 10 years.
Incorrect
The passage states that FD tenure can range from as short as 7 days to as long as 10 years.
Unattempted
The passage states that FD tenure can range from as short as 7 days to as long as 10 years.
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Question 12 of 30
12. Question
What is a key feature of an FD interest rate during its tenure?
Correct
The passage states that FD interest rates are fixed for the entire tenure.
Incorrect
The passage states that FD interest rates are fixed for the entire tenure.
Unattempted
The passage states that FD interest rates are fixed for the entire tenure.
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Question 13 of 30
13. Question
What generally happens to FD rates when the central bank raises the repo rate, according to the passage?
Correct
The passage states that commercial banks generally increase FD rates to attract deposits when the repo rate rises.
Incorrect
The passage states that commercial banks generally increase FD rates to attract deposits when the repo rate rises.
Unattempted
The passage states that commercial banks generally increase FD rates to attract deposits when the repo rate rises.
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Question 14 of 30
14. Question
How is interest generally paid under a Simple Fixed Deposit?
Correct
Simple FDs pay interest periodically, such as monthly, quarterly, or annually, according to bank terms.
Incorrect
Simple FDs pay interest periodically, such as monthly, quarterly, or annually, according to bank terms.
Unattempted
Simple FDs pay interest periodically, such as monthly, quarterly, or annually, according to bank terms.
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Question 15 of 30
15. Question
What happens to interest in a Cumulative Fixed Deposit?
Correct
Interest is reinvested and paid along with the principal at maturity.
Incorrect
Interest is reinvested and paid along with the principal at maturity.
Unattempted
Interest is reinvested and paid along with the principal at maturity.
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Question 16 of 30
16. Question
What does a Flexi Fixed Deposit or Sweep-in FD combine?
Correct
A Flexi FD combines features of a demand deposit and a fixed deposit.
Incorrect
A Flexi FD combines features of a demand deposit and a fixed deposit.
Unattempted
A Flexi FD combines features of a demand deposit and a fixed deposit.
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Question 17 of 30
17. Question
What may happen when an FD is withdrawn before maturity?
Correct
Premature withdrawal is allowed in the passage, though penalties may be charged and the applicable interest rate may be lower.
Incorrect
Premature withdrawal is allowed in the passage, though penalties may be charged and the applicable interest rate may be lower.
Unattempted
Premature withdrawal is allowed in the passage, though penalties may be charged and the applicable interest rate may be lower.
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Question 18 of 30
18. Question
If an FD made for 5 years at 8% is withdrawn after 2 years, what rate is used in the example?
Correct
The example states that interest would be calculated at the rate applicable to a 2-year FD, such as 5%.
Incorrect
The example states that interest would be calculated at the rate applicable to a 2-year FD, such as 5%.
Unattempted
The example states that interest would be calculated at the rate applicable to a 2-year FD, such as 5%.
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Question 19 of 30
19. Question
What does FDR stand for in Fixed Deposit banking?
Correct
FDR stands for Fixed Deposit Receipt.
Incorrect
FDR stands for Fixed Deposit Receipt.
Unattempted
FDR stands for Fixed Deposit Receipt.
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Question 20 of 30
20. Question
What is the purpose of a Fixed Deposit Receipt (FDR)?
Correct
The FDR serves as proof of the deposit and contains details such as amount, interest rate, and tenure.
Incorrect
The FDR serves as proof of the deposit and contains details such as amount, interest rate, and tenure.
Unattempted
The FDR serves as proof of the deposit and contains details such as amount, interest rate, and tenure.
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Question 21 of 30
21. Question
When must the FDR be surrendered according to the passage?
Correct
The FDR must be surrendered when renewing or encashing the FD.
Incorrect
The FDR must be surrendered when renewing or encashing the FD.
Unattempted
The FDR must be surrendered when renewing or encashing the FD.
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Question 22 of 30
22. Question
At what rate may an FD be automatically renewed?
Correct
Automatic renewal may renew the FD for the same term at the rate applicable on the maturity date.
Incorrect
Automatic renewal may renew the FD for the same term at the rate applicable on the maturity date.
Unattempted
Automatic renewal may renew the FD for the same term at the rate applicable on the maturity date.
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Question 23 of 30
23. Question
Which organization provides deposit insurance for FDs in India according to the passage?
Correct
The passage identifies the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Incorrect
The passage identifies the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Unattempted
The passage identifies the Deposit Insurance and Credit Guarantee Corporation (DICGC).
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Question 24 of 30
24. Question
What is the deposit insurance guarantee mentioned for FDs in India?
Correct
The passage states that DICGC provides a guarantee of up to ₹500,000 per depositor per bank.
Incorrect
The passage states that DICGC provides a guarantee of up to ₹500,000 per depositor per bank.
Unattempted
The passage states that DICGC provides a guarantee of up to ₹500,000 per depositor per bank.
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Question 25 of 30
25. Question
Under which section of the Income Tax Act are tax-saving FDs eligible for deductions according to the passage?
Correct
The passage states that tax-saving Fixed Deposits are eligible under Section 80C.
Incorrect
The passage states that tax-saving Fixed Deposits are eligible under Section 80C.
Unattempted
The passage states that tax-saving Fixed Deposits are eligible under Section 80C.
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Question 26 of 30
26. Question
What percentage of the FD value may banks typically offer as a loan against an FD?
Correct
The passage states that banks typically offer loans of up to 80-90% of the FD value.
Incorrect
The passage states that banks typically offer loans of up to 80-90% of the FD value.
Unattempted
The passage states that banks typically offer loans of up to 80-90% of the FD value.
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Question 27 of 30
27. Question
How much higher is the loan interest rate usually than the FD rate according to the passage?
Correct
The loan interest rate is usually 1-2% higher than the FD rate.
Incorrect
The loan interest rate is usually 1-2% higher than the FD rate.
Unattempted
The loan interest rate is usually 1-2% higher than the FD rate.
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Question 28 of 30
28. Question
According to the passage, when is TDS deducted on FD interest?
Correct
The passage states that if FD interest exceeds ₹10,000 in a financial year, TDS is deducted at 10%.
Incorrect
The passage states that if FD interest exceeds ₹10,000 in a financial year, TDS is deducted at 10%.
Unattempted
The passage states that if FD interest exceeds ₹10,000 in a financial year, TDS is deducted at 10%.
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Question 29 of 30
29. Question
What does Form 16A serve as in relation to FD TDS?
Correct
Banks issue Form 16A quarterly as a receipt for the TDS.
Incorrect
Banks issue Form 16A quarterly as a receipt for the TDS.
Unattempted
Banks issue Form 16A quarterly as a receipt for the TDS.
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Question 30 of 30
30. Question
Which form is mentioned for individuals below 60 years seeking exemption from TDS, subject to the stated conditions?
Correct
The passage states that Form 15G is for those below 60 years, while Form 15H is for those above 60 years.
Incorrect
The passage states that Form 15G is for those below 60 years, while Form 15H is for those above 60 years.
Unattempted
The passage states that Form 15G is for those below 60 years, while Form 15H is for those above 60 years.