Which of the following statement/s is/are incorrect?

The correct answer is option 1.

Key Points

• Current Account typically accounts for the smallest fraction among the current, savings, and term deposits. This is due to its primary use for business transactions rather than savings.
• Savings accounts have a limit on the number of transactions that can be done in a month, distinguishing them from Current Accounts.
• Current accounts are designed for frequent transactions and come with overdraft facilities, allowing the account holder to withdraw more than their account balance.
• Savings accounts generally require maintaining a minimum balance, which can vary from bank to bank.

Additional Information

• Current Account:
  • Primarily used by businesses for regular transactions.
  • Offers overdraft facility to cover short-term cash flow needs.
  • Usually does not earn interest.
• Savings Account:
  • Meant for individuals to save money while earning interest.
  • Limited number of transactions allowed per month.
  • Requires a minimum balance to be maintained.
• Term Deposit:
  • Also known as Fixed Deposit (FD).
  • Money is deposited for a fixed tenure at a predetermined interest rate.
  • Penalties apply for premature withdrawal.
• Overdraft Facility:
  • Allows account holder to withdraw more than their account balance.
  • Interest is charged on the overdrawn amount.
  • Commonly available with Current Accounts.