Question

which type of account typically has very high liquidity, low or no interest, and low minimum balance?

Answer 1

Answer: Checking Accounts

Explanation:

The following are some type of accounts,

a). Checking Account- It gives the depositor the lowest level of interest and has a very high liquidity. This account has no or low minimum balance.

b). Savings Account- This has a low interest but gives the flexibility to the depositor to withdraw the money at anytime.

c). Money market account- This account type has a higher interest than any saving or checking account with some minimum balance requirements.

d). CD's (Certificate of Deposits)- This account type has the highest interest at the cost of locking up your funds for a certain period.

Therefore, Checking account is the correct option which has all the features low liquidity, low interest and low minimum balance.

Answer 2

Checking accounts: best for unrestricted access to funds; typically worst for earning interest.

Savings accounts: good for earning some interest with quick access to funds.

Money market accounts: can have higher interest than savings accounts, plus some check-writing and ATM access.

Certificates of deposit (CDs): highest interest rates in exchange for most-limited access to funds