BANKING AFFAIRS

Detailed explanation-1: -A Investment Retirement Account (IRA) B Checking Account C Money Market Account D Certificate of Deposit (CD) AI Recommended Answer: A checking account typically has low liquidity, low or no interest, and a minimum balance.

Detailed explanation-2: -Money market accounts combine features of savings accounts and checking accounts-such as the ability to earn interest and write checks. Money market accounts are highly liquid, meaning you can withdraw your money at any time. However, like savings accounts, some banks may limit you to six withdrawals a month.

Detailed explanation-3: -Certificate of deposit is the least liquid type of account (CD). In a certificate of deposit, a bank customer deposits a lump-sum payment in the account, which can then be withdrawn after a set period of time. The interest rate on a CD is higher than on a regular savings account.

Detailed explanation-4: -Checking accounts are very liquid, allowing for numerous deposits and withdrawals, as opposed to less liquid savings or investment accounts. The tradeoff for increased liquidity is that checking accounts don’t offer holders much, if any, interest.

Detailed explanation-5: -Regular Checking Accounts A regular checking account usually pays little or no interest on your balance. So if you’re looking for a little income, you may consider opening up a companion savings account to your checking account.