Bank pays interest on:

**The reasoning** Think about the relationship between you and a bank. When you save money in a bank (making a **deposit**), the bank doesn't just store your cash in a vault with your name on it. Instead, the bank *uses* your money to give loans to other customers, invest in businesses, etc. Since the bank is essentially "borrowing" your money to make profit, they compensate you by paying **interest** on your deposits. This is why savings accounts, fixed deposits, and current accounts (sometimes) earn you interest over time. **Why the wrong options tempt you** - **A) Loans** — This is backwards! You pay interest *on* loans you collect from the bank, not the other way around. - **C) Cheques** — These are just payment instruments (like writing an IOU). No interest involved. - **D) Drafts** — Similar to cheques, these are payment orders. Banks charge *fees* for them, not interest. **Quick takeaway** Banks pay you interest when they hold YOUR money (deposits); you pay THEM interest when you hold THEIR money (loans).