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sir when we have too much cash balances in the company thats not sensible to keep it in the current account because the current account will not give interest but when we deposit in a fixed deposit we will get interest .
am i correct sir
?so when cash is deposited in the current account the company will not get any returns ?
That is correct for most banks. Most banks do not pay interest on current accounts but do pay interest on deposit accounts. Even banks that do pay interest on current accounts pay much lower interest than the rate they pay on deposit accounts.
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