Interest$-$paying checking accounts $-$ Their features and uses

What are interest$-$paying checking accounts and how do they work?

Most interest$-$paying checking accounts exhibit characteristics of both checking and savings accounts. Specifically, they earn relatively high rates of interest, especially compared with regular savings accounts, and allow relatively limited check$-$writing privileges. They are available through depository and nondepository institutions, including commercial banks, savings banks, credit unions, stock brokerage firms, mutual funds, and other financial services companies.

What are some of the important characteristics of the following four major types of interest$-$paying checking accounts?

The following tables shows abbreviations for the types of accounts:

Abbreviations

AMA: Asset Management Accounts

MMDA: Money Market Deposit Accounts

MMMF: Money Market Mutual Funds

NOW: Negotiable Order of Withdrawal

Use the following table to indicate which of the money market accounts is described in the statements.

$\backslash$table$[[$Funds invested in this account are protected by government$-],[$sponsored deposit insurance programs.$]]$

Use the fundamental characteristics of the four major types of interest$-$paying checking accounts to assess the following scenario.

Your good friend Alyssa received an inheritance from a distant relative. Alyssa asks your advice about interest$-$paying checking accounts. She wants to create a unified and coordinated bundle of checking, savings, stock brokerage, and mutual fund accounts whose transactions are reported in a single monthly statement.

Which interest$-$paying checking account would you recommend to Alyssa?

An AMA

A NOW account

An MMMF