Answer:B
Explanation:
time based account -An agreement between a bank and a person or institution, whereby the bank agrees to hold money and/or other assets on behalf of the other party. What the holder may do with those assets depends upon the nature of the account. In a checking account or a savings account, the bank holds money and pays the client a certain percentage in interest. This payment gives the bank the right to lend the money to other clients or invest it within the confines of law and banking regulations. However, the client has the right to withdraw the total amount of money on demand.
The statement that is incorrect about the certificate of deposits is that they have a low-interest rate.
CD or certificate of deposit is a product offered by a bank or union to the customers who agree to deposit a fixed amount with the bank for a fixed period of time such as 6 months, 1 year, or 5 years.
In return, the bank offers interest to the customer on their deposits. The rate of interest offered on the certificate of deposit is generally higher than that of a saving account.
The customer can acquire a certificate of deposit by depositing the amount equal to 5 lakh and the multiple thereof.
Thus, there is a requirement for a minimum balance in the certificate of deposit and they are time-based accounts. If the consumer withdraws the amount before the expiry of the tenure, it attracts the penalty as provided by the provisions.
Therefore, the correct option is A.
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