Which of the following is an advantage of using a checking account?

• A. It restricts withdrawals to once per month.
• B. It requires no record-keeping or monitoring of transactions.
• C. It typically earns a higher interest rate than savings accounts.
• D. It allows for easy access to funds for everyday transactions.

Answer: (D)

Verified step by step guidance

1. Understand the purpose of a checking account: A checking account is designed to provide easy access to funds for everyday transactions, such as paying bills, making purchases, or withdrawing cash.
2. Evaluate the options provided in the question: Analyze each statement to determine whether it aligns with the primary function and benefits of a checking account.
3. Option 1: 'It restricts withdrawals to once per month.' This is incorrect because checking accounts typically allow unlimited withdrawals and transactions, making them convenient for daily use.
4. Option 2: 'It requires no record-keeping or monitoring of transactions.' This is incorrect because checking accounts require monitoring to ensure proper management of funds and avoid overdrafts.
5. Option 3: 'It typically earns a higher interest rate than savings accounts.' This is incorrect because checking accounts generally earn little to no interest compared to savings accounts. The correct answer is: 'It allows for easy access to funds for everyday transactions,' which aligns with the primary advantage of a checking account.