Question

Juan saved $1,000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?

Answer 1

Options:

• Regular savings account

• Money Market account

• Checking Account

• Certificate of Deposit

Answer:

Certificate of Deposit

Step-by-step explanation:

Required

Which of the given options has the highest interest rate

To do this, we have to list out the interest rates of each of the given accounts:

• A regular savings account has the least interest rate which is around 0.04% APY.

• The interest rate on money market account is between 0.30% and 0.50% APY.

• The interest rate on checking account is between 0.06% and 0.09% APY.

• The interest rate on Certificate of Deposit is between 0.55% and 0.80% APY.

So, by comparison:

Juan will earn more if he uses Certificate of Deposit