Question

Question 13 (1 point)

Biyu is saving for a down payment on a house. She has decided to open a money
market account so that she can earn interest on the money that she is setting aside.
Should she close the regular savings account that she uses to pay for unexpected
expenses?
No, she should have as many accounts as possible.
Yes, it is always better to have all her savings in one place.
No, she should keep a little money in her savings for 'extra bills.
Yes, she can be sure that the will not to withdraw funds several times.

Answer 1

Biyu should not close her regular savings account when opening a money market account, as it is wise to maintain an emergency fund that is readily accessible for unexpected expenses.

Step-by-step explanation:

The decision to keep or close a regular savings account while opening a money market account should be based on the purpose of each account and personal financial needs. It is generally recommended to maintain a liquid savings account for unexpected expenses and emergencies.

A savings account offers the benefit of liquidity and security, and is typically where one should keep an emergency fund equivalent to at least three to six months of living expenses. On the other hand, money market accounts can offer higher interest rates but may come with certain restrictions. Keeping multiple accounts can be part of a smart financial strategy if they serve different purposes and help in reaching various financial goals.