Question

Robert wants to get serious about saving for a new car. Which account would you recommend? Why?

Answer 1

It’s possible by putting the money in a savings account with high interest or certificate of deposit.

This is because there will be growth in the body as a result of the interests accrued . It is also less risky and safer.

Answer 2

If Robert wants to get serious about saving for a new car, I would recommend that he use a Certificate of deposit account.

When looking for a bank account in which to deposit your money, there are 5 basic options to choose from:

• Savings account
• IRA account
• Money Market account
• Checkings acc.
• Certificate of deposit account

Although the popular choice tends to be the savings account, this account type has drawbacks. The two main concerns in this type of account are that although some have high interest rates, it is not always the option with the highest rate and that with this kind of account, you are able to withdraw money at any time, adding to the temptation to spend the savings and is a common problem when trying to save money.

I would recommend to Robert that he should use a Certificate of deposit account because this type of account does not allow the user to withdraw money until the certificate length is complete and in payment for this, Robert will receive interests on his deposits that are generally higher than that of a savings account.