Question

Nathan has $300 to open a checking account. He wants an account with the lowest fees. He plans on using the ATM machine, and his employer offers direct deposit.

Bank Account Terms and Conditions
Bank A has a minimum balance of 500 dollars, interest of 0.1 percent, overdraft protection, 0 dollar ATM fee, and 0 dollar monthly fee. Bank B has a minimum balance of 250 dollars, interest of 0 percent, no overdraft protection, 0 dollars for all A B C bank A T M s, and 5 dollar monthly fee. Bank C has 50 dollar minimum balance, 0.1 percent interest, no overdraft protection, 2 dollar per A T M transaction, 10 dollar monthly fee or 0 dollars with direct deposit. Bank D has 100 dollar minimum balance, 0.1 percent interest, no overdraft protection, 0 dollar A T M fee, and 5 dollar monthly fee or 0 dollars with direct deposit.

Which checking account would be best for Nathan?
Account A
Account B
Account C
Account D

Answer 1

Account D

Explanation:

You want to know which of several bank accounts would be best for Nathan.

Minimum deposit

Nathan does not have sufficient funds to meet the minimum deposit requirements of Bank A, so that one can be eliminated.

ATM Fee

Bank C charges a fee for ATM use, so would not be preferred.

Monthly Fee

Bank B has a $5 monthly fee. The $5 monthly fee at Bank D can be waived with direct deposit, which Nathan can do.

Having eliminated banks A, B, and C, the only reasonable choice for Nathan is an account at Bank D.

__

Additional comment

Overdraft protection is rarely needed with good money management practice. The minimum balance required should mean that no overdraft would ever occur.

<95141404393>