Question

8/29 - banking pre-assessment knowledge check
saving accounts differ from checking accounts in that...
○ saving accounts have unlimited transactions
○ saving accounts have more fees
○ saving accounts have overdraft protection
○ saving accounts have higher interest rates

Explanation:

• Saving accounts have unlimited transactions: False. Savings accounts usually have transaction limits (e.g., 6 per month for certain types of transactions like transfers out in the US under Regulation D).
• Saving accounts have more fees: False. Checking accounts (especially those without meeting certain requirements like minimum balance) can have more fees like monthly maintenance fees, overdraft fees (if no overdraft protection), etc. Savings accounts generally have fewer fees.
• Saving accounts have overdraft protection: False. Overdraft protection is more commonly associated with checking accounts. It is a service that banks offer to cover transactions that would overdraw a checking account balance (usually for a fee).
• Saving accounts have higher interest rates: True. Savings accounts are designed to encourage saving. Banks offer higher interest rates (compared to basic checking accounts) to customers who deposit money in savings accounts as an incentive for long - term (less liquid) deposits.

Answer:

Saving accounts have higher interest rates.