Q. Consider the following statements regarding the difference between current accounts and savings accounts in banks:

1. While current accounts usually earn no interest, savings accounts earn interest on deposits.
2. While current account deposits are usually demand deposits, saving account deposits are time deposits.
3. While current accounts have an overdraft facility, savings accounts generally have no overdraft facility.

Which of the above statements is/are correct?
Answer: 1 and 3 only
Notes: Statements 1 and 3 are correct: Current accounts typically do not earn interest, whereas savings accounts do. Current accounts also usually provide an overdraft facility, unlike savings accounts. However, statement 2 is incorrect; both current and savings account deposits are demand deposits, not time deposits, as funds can be withdrawn at any time without notice or penalty.