Question

Besides earning interest, what is a difference between a basic checking account and an interest-bearing checking account?

Basic accounts are more likely to have a minimum balance
Basic accounts are more likely to use a debit card
Interest-bearing accounts are more likely to have a minimum balance
Interest-bearing accounts are more likely to use a debit card

Answer 1

Interest-bearing accounts are more likely to have a minimum balance.

Step-by-step explanation:

A basic checking account is primarily used for everyday transactions. This sets it apart from the interest-bearing account (like the Savings Account) and this is also the reason why it doesn't necessarily need a minimum balance. On the contrary, interest-bearing accounts require a minimum balance and this balance earns a particular rate over time. It is meant for "saving money." Thus, it is common to have the interest-bearing account as a separate account (reserved for saving) compared to the basic checking account.

Thus, this explains the answer.