Chapter P1, Problem 4RQ

To determine

The reasons why someone would open more than one type of bank account

Explanation of Solution

Due to the following reasons people need to open more than one type of bank account:

1. More than one type of account helps people to reach their different saving goals as they can make bill payments and non-essential purchases from a separate account that helps them to know and track each expense from that account. And they can put their savings in another separate account.
2. It assists people to use their funds efficiently because they can keep their expenses or spendings better organized. Moreover, multiple bank accounts keep their personal and business income or spending separate through the separate business account.
3. People can keep their cash reserve or emergency fund in a separate account which makes it easy to not pay for their bills or purchases from that account.
4. It helps them to maintain the minimum balance in each account and they can get more interest rates from each account by paying a lower fee.
5. Banks provide different banking packages and rewards to customers who have various accounts which include waived fees for the market account, interest checking account, automatic transfers, and better tracking options.

Economics Concept Introduction

Introduction: A bank account refers to a financial account that is important to make easy financial transactions. Bank accounts are maintained by a financial institution by charging a minimal fee where people can keep their savings and make expenses whenever required.