ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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No minimum balance requirements
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Unlimited transactions every month
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Tiered interest rates
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The money must remain in the account for a specific period of time
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Detailed explanation-1: -Money market accounts pay a variable interest rate, so the rate consumers earn on their money can fluctuate over time. It’s common for these accounts to have tiered rates, meaning higher balances are rewarded with a higher annual percentage yield (APY).
Detailed explanation-2: -A tiered-rate account is a bank account that pays different rates of interest, depending on the amount of the funds held in it. It can be any type of account but usually is either a money market or a savings account.
Detailed explanation-3: -A tiered money market account is one that offers different rates at different dollar amounts. As a result, the rate you get depends on the amount of money you have in the account. This might differ from the rate the bank is advertising.
Detailed explanation-4: -Money market accounts have higher interest rates than traditional savings accounts. Money market accounts limit your withdrawals per month and typically have a higher balance requirement than traditional savings accounts.
Detailed explanation-5: -If there is $30, 000 in an account that pays tiered interest, X% is paid on the first $1, 999, Y% is paid on the amount from $2, 000 to $24, 999 and Z% is paid on the amount from $25, 000 to $30, 000. The interest rate of each tier can be separately managed.