Question

There are two major types of checking accounts. The distinguishing characteristic involves which of the following?

A. The nature of the financial institution that offers the accounts
B. The payment of interest by some accounts and not others

Answer 1

The two main types of checking accounts are distinguished by whether they offer interest payments, with some modern checking accounts resembling savings accounts in offering interest when a minimum balance is kept.

Step-by-step explanation:

The two major types of checking accounts are distinguished by one key characteristic: the payment of interest. Some checking accounts are now similar to savings accounts in that they offer interest if a certain minimum balance is maintained. This is in contrast to traditional checking accounts, which typically provide little to no interest.

The lines between checking and savings accounts have become blurred due to changes in banking practices, offering more flexibility in how accounts can be used, like writing checks from savings accounts and earning interest from checking accounts.