Question

What makes a savings account a better investment than a checking account?

O A savings account can be accessed with a debit card.
OA savings account earns interest.
O A savings account is like part ownership in a bank.
OA savings account allows for a tax deduction.

Answer 1

Savings accounts typically offer a higher interest rate

Step-by-step explanation:

Savings accounts are often a better investment than checking accounts because they typically offer higher interest rates than checking accounts. This means that banks pay interest into your account, usually monthly, and you'll continue to earn interest on any interest-bearing savings account for as long as the money stays in the account.

Savings accounts are not made for everyday transactions, so you can store money in the account for longer to collect interest. Because savings accounts are not made for everyday transactions, checking accounts are better for regular transactions such as purchases, bill payments, and ATM withdrawals.

However, savings accounts often restrict how often you can withdraw money without penalty and may require a minimum balance to earn interest. Savings accounts also have lower interest rates than other accounts or investments, and federal limits on saving withdrawal.