Juan saved $1 000 from his summer job cleaning pools. Which of these savings vehicles would work best for him if he doesn't need access to the money for a number of years AND wanted to earn the highest interest rate?

a. Certificate of Deposit

b. Checking account

c. Regular savings account

d. Money Market account

a. Certificate of Deposit

Explanation:

Under Certificate of deposit schemes of banks, a customer is provided with a higher rate of interest in exchange for not withdrawing the said sum for a number of years i. e compromising on liquidity. The funds get locked for a pre determined term ...

Such deposits provide higher rate of interest than on regular savings deposits or money market account.

In the given case, Juan does not require to withdraw the money invested for a number of years, at the same time desirous of earning a higher rate of interest. As per his requirements, Certificate of Deposits is recommended.