Question

What do money market savings accounts typically require in exchange for higher interest rates?

A.a ten-year maturity
B.a cosigner on the account
C.a limit on the number of withdrawals
D.a higher minimum balance

Answer 1

D. a higher minimum balance. Money market savings accounts typically offer higher interest rates than regular savings accounts in exchange for maintaining a higher minimum balance. This requirement helps banks manage their liquidity and reduce their risk, allowing them to offer higher returns to depositors. Some money market savings accounts may also have limits on the number of withdrawals, or require a ten-year maturity, but a higher minimum balance is a common requirement.