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Income Beginner: Introduction to Deposit Accounts

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1.
Which of the following is a reason an investor might open a deposit account?
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All of the above. Investors open deposit accounts for all of these reasons.
2.
The simplest kind of deposit account to set up and maintain is a _______.
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Passbook account. A passbook account is easy to start, offers immediate access to funds, and requires low minimum balances.
3.
The higher the interest/dividend rate paid, the higher the minimum balance a deposit account usually requires.
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True. The tradeoff for higher earnings rates is letting the financial institution hold more of your money.
4.
High-balance deposit accounts typically charge penalties for early withdrawal.
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False. Your money is always available.
5.
Asset management accounts make tax preparation easy.
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True. Combined statements listing all your financial transactions make it easy to find the information you need to prepare your return.