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Income Beginner: Introduction to Deposit Accounts

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1.
All of the following are advantages of deposit accounts except _______.
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High rates of return. High rates of return are not an advantage of deposit accounts, which typically pay lower returns than other investment opportunities.
2.
An account that combines savings, checking, credit/debit card services, and a line of credit in one account is a(n) _______.
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Asset management account. An asset management account combines many banking and investment features in one account.
3.
Deposit accounts can be appropriate for investors with low risk tolerance.
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True. The high degree of security they provide make deposit accounts an effective alternative for those who can't afford to lose their capital.
4.
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.
5.
Because deposit accounts pay relatively low yields, investors have little need of them.
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False. Deposit accounts can be useful tools for accumulating investment capital, sheltering funds during market downturns, and maintaining a supply of liquid cash.