Business, 04.02.2020 20:44 heavendl13

Which type of account typically has very high liquidity, low or no interest, and low minimum balance? checking account money market account certificate of deposit (cd) investment retirement account (ira)

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The type of account that typically has very high liquidity, low or no interest, and low minimum balance is a checking account. A checking account in most cases does not offer interest for keeping your money in the bank whereas a savings account usually does. The minimum balance is very low commonly $25 or a direct deposit going into the account will work instead of having a minimum balance. Most people keep a smaller amount of money in their checking account and a larger amount in their savings.

Answer from: bhadd2001

Checking account has very high liquidity, low or no interest, and low minimum balance.

Further Explanation:

Checking Account: Checking account refers to a type of bank account via which the easy flow of money from the account of the account holder is possible. This account is mostly used for paying the bills and other financial transactions. Checking account is highly liquid in nature as it allows the withdrawal of the funds through checks, ATM machines, and online banking. Checking account does not have the withdrawal limit; so the account holders can make many as many transactions as they want. Various alternate ways to withdraw the money makes it a highly liquid account.

Justification for the correct and incorrect options:

Checking account: This is the correct option.

Checking account allows the account holder to withdraw the funds without any limit, so it has high liquidity.

Money market account: This is an incorrect option.

Money market account pays a high amount of interest.

Certificate of Deposit: This is an incorrect option.

The account holder can withdraw the funds only after the maturity date.

Investment Retirement Account: This is an incorrect option.

Investment retirement account (IRA) provides interest on the invested funds.

Learn more:

1. Learn more about the low liquidity bank accounts

2. Learn more about the traditional saving account

3. Learn more about the role of money

Answer details:

Grade: High School

Subject: Business Studies

Chapter: Money and Banking

Keywords: Type of account, typically, very high, liquidity, low or no interest, low minimum balance, Checking Account, Money Market Account, Certificate of Deposit (CD), Investment Retirement Account (IRA), bank account.

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Which type of account typically has very high liquidity, low or no interest, and low minimum balance...

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