Which of the following statements about savings accounts is false?
a) Savings accounts may require you to maintain a minimum balance to avoid paying a fee.
b) Savings accounts are best used to store money for longer-term goals.
c) Savings accounts limit the number of withdrawals that can be made each month.
d) Savings accounts don’t usually pay interest on the money you deposit.
The correct answer is:
d) Savings accounts don’t usually pay interest on the money you deposit.
Savings accounts typically do pay interest on the money deposited, although the interest rate may vary depending on the bank or financial institution.
Interest is a key feature of savings accounts, making them a safer, low-risk way to grow your money compared to keeping it in cash or a checking account (which often doesn’t pay interest).
Why the other statements are true:
a) Savings accounts may require you to maintain a minimum balance to avoid paying a fee.
This is correct because many banks impose a minimum balance requirement. If your account balance falls below this threshold, you might incur monthly fees.
b) Savings accounts are best used to store money for longer-term goals.
This is true because savings accounts are designed to securely hold money while earning interest. They’re less suited for daily transactions but ideal for building funds for emergencies, education, or future expenses.
c) Savings accounts limit the number of withdrawals that can be made each month.
This is accurate because, traditionally, federal regulations (e.g., Regulation D in the U.S.) have limited certain withdrawals or transfers from savings accounts to six per month. Although some banks may allow more flexibility, this rule is still commonly enforced.
In summary, all the other options reflect typical features of savings accounts, whereas statement d incorrectly describes the relationship between savings accounts and interest earnings.
MBA,BBA.
I am Smirti Bam, an enthusiastic edu blogger with a passion for sharing insights into the dynamic world of business and management through this website.
I hold a MBA degree from Presidential Business School, Kathmandu, and a BBA degree with a specialization in Finance from Apex College,
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