Exploring Types of Bank Accounts

The video tutorial explains five types of bank accounts: savings accounts, basic checking accounts, interest-bearing checking accounts, money market deposit accounts, and certificates of deposit (CDs). Each type is described in terms of its features, interest rates, and associated fees. Savings accounts are designed for saving money with low interest rates. Basic checking accounts offer no interest but allow check writing. Interest-bearing checking accounts provide interest and additional services but require higher fees. Money market accounts offer higher interest rates with limited check writing. CDs are long-term investments with the highest interest rates but restrict access to funds until maturity.

What is the primary purpose of a savings account?

• To use a debit card for daily transactions

• To write unlimited checks

• To save money with higher interest rates than checking accounts

• To invest in long-term bonds

Which type of bank account typically does not offer checks?

• Basic checking account

• Interest-bearing checking account

• Savings account

• Money market deposit account

What can trigger additional fees in a basic checking account?

• Earning interest

• Depositing money frequently

• Writing too many checks in a month

• Maintaining a high balance

What distinguishes an interest-bearing checking account from a basic checking account?

• No checks allowed

• Higher interest rates and additional services

• Lower minimum balance requirements

• No fees associated

What is required to maintain an interest-bearing checking account?

• Unlimited check writing

• No minimum balance

• A lower fee

• A higher maintenance cost

What type of investments do banks use money from money market deposit accounts for?

• Real estate

• Stock market investments

• Long-term bonds

• Short-term debt like treasury bills

How often can checks be written from money market deposit accounts?

• Only online transfers allowed

• Limited number per month

• None at all

• Unlimited

What is the typical duration range for a certificate of deposit (CD)?

• 10 to 15 years

• 1 to 2 years

• 5 to 10 months

• 3 to 6 years

What happens if money is withdrawn early from a CD?

• A steep penalty fee is applied

• No penalty is charged

• The interest rate increases

• A bonus is given

Which account offers the highest interest rate?

• Certificate of Deposit (CD)

• Basic checking account

• Interest-bearing checking account

• Money market deposit account