Question

Bank pays interest on

• A. Deposits
• B. Loans
• C. Both (A) and (B)
• D. None of these

Hint:

Interest paid is an expense for banks on deposits, not loans.

Answer 1

The Correct Option is A

Step 1: Banks pay interest to depositors on the money they save with the bank. Step 2: Banks charge interest on loans, but they do not pay interest to borrowers; instead, they receive it. Step 3: Therefore, the correct option is (A) Deposits.