Question

All of the following are benefits of using a checking account except?

1) multiple options for using funds to make payments
2) checking accounts act as a good savings vehicle
3) access to cash via atms
4) your money is protected by fdic insurance

Answer 1

Checking accounts are designed for transactions and not for saving, as they typically offer lower interest rates compared to savings accounts. They provide easy access to funds, multiple payment options, and FDIC insurance but are not meant to act as a good savings vehicle.

Step-by-step explanation:

Among the benefits of using a checking account, one option that does not fit is that checking accounts act as a good savings vehicle. While checking accounts offer options for using funds to make payments, access to cash via ATMs, and protection by FDIC insurance, they do not typically serve as good savings vehicles. Savings accounts are more appropriate for this purpose as they usually offer some interest on the deposits.

The main purpose of a checking account is for transactional use, such as writing checks or using a debit card. Checking accounts may provide some interest, especially if a minimum balance is maintained, but they traditionally offer lower interest rates compared to savings accounts. The FDIC insurance guarantees that deposits are protected up to $250,000, ensuring safety for the funds in the event of a bank failure.