When is a savings account the most suitable option for earning interest as an investment?

A. Saving to buy a new car in three years
B. Saving for retirement in 20 years
C. Saving to buy a new house in seven years
D. Savings to make money available quickly when needed

Answer:- D. Savings to make money available quickly when needed

 

Expert Answer

Savings accounts are accounts in which cash can be deposited in order to keep your money secure while generating interest. With relatively low interest rates, the savings account is best utilised for saving money so that it can be accessed when needed. Investing money in a savings account for an extended length of time will result in lower earnings. Investing in a savings account will only make the money available to you when you need it.