Why is it important to have a checking account?

• A. It provides a safe and convenient way to manage daily financial transactions.
• B. It guarantees a high interest rate on your savings.
• C. It is required by law for all individuals over 18.
• D. It eliminates the need to keep any financial records.

Answer: (A)

Verified step by step guidance

1. Understand the purpose of a checking account: A checking account is primarily designed to help individuals manage their daily financial transactions, such as paying bills, depositing money, and withdrawing cash conveniently and securely.
2. Evaluate the options provided in the question: Analyze each statement to determine its accuracy and relevance to the purpose of a checking account.
3. Option 1: 'It provides a safe and convenient way to manage daily financial transactions.' This aligns with the primary function of a checking account, making it a correct statement.
4. Option 2: 'It guarantees a high interest rate on your savings.' Checking accounts typically do not offer high interest rates; this is more characteristic of savings accounts.
5. Option 3 and 4: 'It is required by law for all individuals over 18' and 'It eliminates the need to keep any financial records.' Both statements are incorrect as checking accounts are not legally required, and they do not eliminate the need for financial record-keeping.