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Which of the following savings vehicles usually requires a high minimum balance?

a) simple savings account
b) Certificate of Deposit (CD)
c) Checking account
d) all of the above

User Beata
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2 Answers

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Final answer:

The savings vehicle that usually requires a high minimum balance is b) Certificate of Deposit (CD), where money is deposited for a set period for a higher interest rate.

Step-by-step explanation:

The correct answer to the question is b) Certificate of Deposit (CD). A Certificate of Deposit is a savings vehicle that requires a saver to deposit a certain amount of money, typically in the thousands of dollars, and leave it in the bank for a specified period which can range from a few months to several years. In return for this commitment, the bank offers a higher interest rate than that of a regular savings account. CDs usually require a high minimum balance compared to other options like simple savings accounts or checking accounts, which may offer more flexibility but lower interest rates.

Checking accounts, while providing easy access to funds through checks or debit cards, typically have lower minimum balance requirements and pay little to no interest. Simple savings accounts may vary regarding their minimum balance requirements but seldom require the same high levels as CDs.

User Iblue
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B. Certificate of Deposit (CD) is the savings vehicle which usually requires a high minimum balance.
A CD is a certificate issued by a bank to a person depositing money for a specified length of time at a specified rate of interest.
User Deathrace
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