A fixed deposit account is beneficial to its holders because
Answer Details
A fixed deposit account is beneficial to its holders because it typically offers a higher interest rate than a regular savings account. When you open a fixed deposit account, you deposit a fixed sum of money for a fixed period of time, usually ranging from a few months to several years. The bank pays you a fixed rate of interest on your deposit, which is typically higher than the interest rate paid on a regular savings account.
Since the money in a fixed deposit account cannot be withdrawn until the end of the fixed period, this encourages people to save their money for a longer term. This can help people to plan their finances and achieve their financial goals.
Furthermore, a fixed deposit account is a safe and secure investment as it is protected by the government's deposit insurance scheme, which ensures that your money is safe even if the bank were to fail.
In summary, a fixed deposit account is beneficial to its holders because it provides a higher interest rate than a regular savings account, encourages long-term saving, and is a safe and secure investment. It does not allow customers to overdraw their accounts or issue cheques to settle huge debts, nor does it offer the opportunity to become a shareholder of the bank.