Which type of account will typically have the highest interest rate? a savings account b certificate of deposit (cd) c money market account d checking account

Answer

Certificate of Deposit (CD)

Explanation

Certificate of deposit is a savings certificate which has a fixed maturity date. In certificate deposit the interest rate rate is fixed and there is penalty if you withdraw funds before maturity ans this may lead to inflation in your savings. Compared to other saving accounts like Savings Account,Money Market Account,Checking Account among others, Certificate deposit typically have highest rate interms of interest.

The correct option is Certificate of Deposit (CD).

Further Explanation:

Certificate of Deposit (CD) usually provides more interest rate than other type of accounts. These are similar to saving accounts but having fixed duration like 6 months, 1 year, 2 years or 5 years etc. Depositors generally get more interest than other saving accounts but if they withdraw money than they will have penalty usually in the form of low interest rates.

A saving account provides you the interest on money you have saved for the future. The interest rates are vary for different account types.

Money market accounts are similar to the saving accounts but they have a preset minimum account balance limit. If you don’t have minimum required balance than they will penalize you.  

Checking accounts provide you the easy access for your money on daily basis and make sure that your cash is secure. They generally provide you the debit cards for money transaction or bill pay.

Learn more:

1. Learn more about the property tax

2. Learn more about the tax on revenue from property

3. Learn more about the personal tax

Answer details:

Grade: High School

Subject: Business

Chapter: Banking System

Keyword:

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