Zach wants to open an account, but he doesn't know which kind is appropriate. He is interested in earning a higher interest rate and knows that he might not be able to write many checks from his account. In addition, he plans to keep at least $1,000 in his account so he can avoid paying a fee. He definitely wants to have federal deposit insurance. What kind of account should he open?

Question

Quizplus · Accepted Answer

A money market account would be the best choice for Zach as it offers a higher interest rate than a regular savings account and typically requires a higher minimum balance to avoid fees. It also provides federal deposit insurance. While a certificate of deposit also offers higher interest rates, it typically requires a longer commitment of time and limited access to funds. An interest-earning checking account may require a certain number of transactions to qualify for the higher interest rate and may have lower rates than a money market account. A money market fund is an investment option, not a bank account.

Zach Wants to Open an Account, but He Doesn't Know