What type of account did Sawyer open, which requires a large initial deposit but offers high interest and easy access?

• A. Regular savings account
• B. Money Market Account (MMA)
• C. Certificate of Deposit
• D. Checking account

Answer: (B)

Sawyer opened a Money Market Account (MMA), which is designed to provide a balance between the savings of a traditional account and the accessibility of a checking account. MMAs typically require a larger initial deposit compared to regular savings accounts, and they often offer higher interest rates as a result. The funds in a Money Market Account can still be accessed relatively easily, allowing for limited withdrawals and transfers, making it a flexible option for individuals who want to earn a higher return on their money while maintaining some degree of liquidity.

In contrast, a regular savings account typically has lower interest rates and fewer requirements for deposits, while a Certificate of Deposit (CD) involves locking funds for a set period to earn higher interest, which restricts access. A checking account, on the other hand, is primarily meant for daily transactions and does not usually offer interest or require a large initial deposit.