Which of the following types of accounts does NOT earn interest?

• A. Checking account
• B. Savings account
• C. Certificate of deposit (CD)
• D. Money market account

Answer: (A)

Verified step by step guidance

1. Understand the concept of interest-earning accounts: Interest-earning accounts are financial accounts where the bank pays the account holder a percentage of the balance as interest over time. Common examples include savings accounts, certificates of deposit (CDs), and money market accounts.
2. Review the characteristics of each account type: Checking accounts are primarily used for daily transactions and typically do not earn interest. Savings accounts, CDs, and money market accounts are designed to grow money over time and usually earn interest.
3. Identify the purpose of a checking account: A checking account is designed for frequent access to funds, such as paying bills or making purchases. Because of its transactional nature, it generally does not offer interest on the balance.
4. Compare checking accounts to other account types: Savings accounts, CDs, and money market accounts are intended for saving money and often have restrictions on withdrawals or minimum balance requirements, which allow banks to pay interest on these accounts.
5. Conclude that checking accounts do not earn interest: Based on the analysis, checking accounts are the type of account listed that does not earn interest, unlike savings accounts, CDs, and money market accounts.