A comparison of an interest-bearing checking account and a savings account reveals that:

Question

Quizplus · Accepted Answer

Deposits in checking accounts are classified as demand deposits, meaning funds can be withdrawn at any time without penalty. On the other hand, deposits in savings accounts are classified as time deposits, which means a penalty may apply for early withdrawal before the maturity date. Interest-bearing checking accounts are essentially a hybrid of checking and savings accounts, providing the convenience of a checking account with the interest-earning potential of a savings account. However, the classification of the account remains as a demand deposit or checking account.

A Comparison of an Interest-Bearing Checking Account and a Savings