Term Account' is a name given to :

Question

Accepted Answer

Explanation:

1. **Why Option 2 is Correct: Fixed Deposit Account**

A "Term Account" is commonly referred to as a Fixed Deposit Account. This type of account involves depositing a sum of money for a fixed period, during which the money cannot be withdrawn without incurring a penalty. The term "fixed" refers to the predetermined period for which the deposit is made, and the interest rate is usually higher than that of a regular savings account. The fixed nature of the deposit period and the interest rate is why it is called a "Term Account." This account is ideal for individuals looking to earn a higher interest rate on their savings without needing immediate access to their funds.

2. **Why the Other Options are Incorrect:**

- **Option 1: Savings Account**
     A Savings Account is a deposit account held at a bank or financial institution that provides a modest interest rate. It is designed for regular deposits and withdrawals, offering liquidity and easy access to funds. Unlike a Fixed Deposit Account, a Savings Account does not have a fixed term, and the interest rates are generally lower. Therefore, it is not referred to as a "Term Account."

- **Option 3: Current Account**
     A Current Account is primarily used by businesses and individuals who need to conduct frequent transactions. It offers high liquidity and allows for numerous deposits and withdrawals. Current Accounts typically do not earn interest, and they are not associated with a fixed term. Hence, they are not called "Term Accounts."

- **Option 4: Post Office Savings Account**
     A Post Office Savings Account is similar to a bank savings account but is operated through the postal system. It offers a safe place to save money with a modest interest rate. Like a regular Savings Account, it does not have a fixed term, and funds can be accessed easily. Therefore, it is not considered a "Term Account."

In conclusion, the term "Term Account" is aptly used for Fixed Deposit Accounts due to their fixed duration and interest rate, distinguishing them from other types of accounts that offer more flexibility and liquidity.