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Fixed Deposit / FD Interview Questions & Answers - Learning Mode

Fixed Deposit / FD Interview Questions & Answers - Learning Mode

A fixed deposit (FD) is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account. It is one of the most Safe methods of investments as there is no market risks in case of a FD.

Try Fixed Deposit / FD Interview Questions & Answers - Exam Mode

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Fixed Deposit / FD Interview Questions & Answers - Learning Mode
Try Fixed Deposit / FD Interview Questions & Answers - Exam Mode
Question: Upto what limits can a company accept deposit?

Answer: A Non-Banking Non-Finance Company(Manufacturing Company) can accept deposit subject to following limits:-

? Upto 10% of aggregate of paid-up share capital and free reserves if the deposits are from shareholders or guaranteed by directors.

? Otherwise upto 25% of aggregate of paid-up share capital and free reserves.

A Non-Banking Finance Company can accept deposits upto following limits:-

? Equipment Leasing Company can accept four times of its net owned fund.

Question: What happens to accounts of a NRI's NRE or FCNR accounts which he/she has opened abroad after his/her return to India?

Answer: A returning Indian's NRE/FCNR accounts is usually designated as a Resident account. Most banks allow these deposits to continue to run till maturity at the contracted rate of interest. Source:
Question: How do I redeem my FD?

Answer: After maturity of your FD, you can walk into any Bank across the country and claim your deposit by furnishing your Fixed Deposit receipt/Memorandum of Deposit. Source:
Question: What is Maturity of an FD?

Answer: Maturity is the time at which the amount in the fixed deposit has to be returned to the investor. The fixed deposit is given for a time period that is decided at the time of making the investment and at the expiry this has to be given back. Source:
Question: What is a Deposit?

Answer: Deposit is a sum of money lodged in a bank for the purpose of earning interest. A deposit is repayable according to terms of acceptance. Source:
Question: What is Repayment of FD?

Answer: Repayment of Fixed Deposit is the action of giving the original amount that is invested back to the investor when the specified time period is over. The process of repayment will complete the entire fixed deposit cycle. Source:
Question: To what asset class does a FD belong?

Answer: Fixed deposits form a part of the debt investment of an investor's portfolio. Source:
Question: What is the period of the Company deposit?

Answer: Company Fixed Deposits can be accepted by a Manufacturing Company having duration from 6 months to 3 years. Non-Banking Finance Company can accept deposit from 1 year to 5 years period. A Housing Finance Company can accept deposit from 1 year to 7 years. Source:
Question: At what frequency will I receive interest on my FD?

Answer: For the Traditional scheme, the interest on the FD account is credited to the Savings account specified by you on a monthly basis or on a quarterly basis. For the Reinvestment scheme, the interest is compounded to the principal amount on a quarterly basis. Source:
Question: What is Future Value of any FD?

Answer: Future Value of any FD is the original amount plus the compound interest thereon, stated as of a specific future date. Source:
Question: Do we get any advantage of investing in a non callable FD instead of a regular FD?

Answer: As an investor the biggest reason why you should consider investing in non callable fixed deposits is the higher rate of interest. The rate of interest in non callable fixed deposits is higher compared to callable fixed deposits for the same tenure. But since Callable fixed deposits allow you to liquidate or break your deposit within the tenure period at any point of time choose your investments carefully. Source:
Question: What are various Deposit time slabs available?

Answer: Deposit time slab is the period for which a term deposit can be made with a bank. There are various time periods for which this is possible like 14-29 days, 181-364 days, 3-5 years and so on. The depositor has to select one of these for the purpose of their deposit. Source:
Question: Can I get a loan against a Fixed Deposit?

Answer: Yes, you can. Most banks offer a loan against FD. By using the fixed deposit as a collateral for the loan you can get a loan at lower rates. The rates are usually pegged at a few percentage points higher than the fixed deposit. Usually banks advance up to 90% of the fixed deposit being held in a loan. Source:
Question: In case of Company Fixed Deposits, where not to Invest?

Answer: ? Companies which offer interest higher than 15%.

? Companies which are not paying regular dividends to the shareholder.

? Companies whose Balance Sheet shows losses.

? Companies which are below investment grade (A or under) rating. Source:
Question: What do you mean by Bank fixed deposits?

Answer: Bank fixed deposits are deposits that are collected from investors by banks for a specific time period are known as bank fixed deposits or bank term deposits. These form the main area of raising funds for banks. Source:
Question: What are the multiples in which I can withdraw money from my FD?

Answer: You can withdraw money from your FD in multiples of Rs 1,000/-. Source:
Question: Do Senior citizens get any extra benefit on the FD?

Answer: Yes, they do get extra benefits in the form of higher interest rates. Source:
Question: What is Deposit Insurance for FDs?

Answer: Explicit Deposit Insurance is a measure implemented in many countries to protect bank depositors, in full or in part, from losses caused by a bank's inability to pay its debts when due. Deposit insurance systems are one component of a financial system safety net that promotes financial stability. Source:
Question: Is there any auto renewal facility available on FD?

Answer: Yes, you can opt for auto renewal at the time of opening the FD or anytime before the FD matures. Auto renewal allows your FD to get renewed automatically for the same period as the original deposit. However under auto renewal option the fixed deposit receipt is with the custody of the Bank and Memorandum of Deposit (MOD) is issued in lieu of fixed deposit receipt. Source:
Question: Are the interest rates for all the banks the same?

Answer: Each bank or financial institution that is offering fixed deposits fixes its own deposit rates. The deposit rates depend upon the financial position of the bank and the conditions that impact the fundraising for the institution. Source:

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