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
| | Minimum Balance | Interest | Overdraft Protection | ATM Fees | Monthly Fee |
|---|-----------------|----------|----------------------|--------------------------|-----------------------------------|
| A | $500 | 01% | yes | $0 for all ATMs | $0 |
| B | $250 | 0% | no | $0 for ABC bank ATMs | $5 |
| C | $50 | 0% | no | $2 per transaction | $10 or $0 with direct deposit |
| D | $100 | 0.1% | no | $0 per transaction | $5 or $0 with direct deposit |
Which checking account would be best for Nathan?
Answer (2)
The best checking account for Nathan is Account D, as it requires a minimum balance he can meet and avoids both monthly and ATM fees with direct deposit. In contrast, Accounts A, B, and C have higher fees or requirements that may not suit him. Overall, Account D provides the lowest overall fees while offering the necessary services he needs.
;
Account A is not feasible due to the minimum balance requirement.
Account B has a $5 monthly fee and requires using specific ATMs.
Account C has $0 monthly fee with direct deposit but charges $2 per ATM transaction.
Account D has $0 monthly fee with direct deposit and $0 ATM fees, making it the best option. The answer is D.
Explanation
Problem Analysis Nathan has $300 to open a checking account and wants the account with the lowest fees. He plans to use the ATM and has direct deposit. We need to evaluate each account based on these criteria.
Account A Account A requires a minimum balance of $500, which Nathan does not have. Therefore, Account A is not an option.
Account B Account B requires a minimum balance of $250, which Nathan has. The monthly fee is $5, and ATM fees are $0 for ABC bank ATMs. If Nathan uses only ABC bank ATMs, this could be a viable option.
Account C Account C requires a minimum balance of $50, which Nathan has. The monthly fee is $10, but it is waived with direct deposit, making it $0. ATM fees are $2 per transaction.
Account D Account D requires a minimum balance of $100, which Nathan has. The monthly fee is $5, but it is waived with direct deposit, making it $0. ATM fees are $0 per transaction.
Comparison Comparing the accounts, Account A is not feasible. Account B has a $5 monthly fee and requires using specific ATMs. Account C has $0 monthly fee with direct deposit but charges $2 per ATM transaction. Account D has $0 monthly fee with direct deposit and $0 ATM fees. Therefore, Account D is the best option.
Conclusion Account D is the best option for Nathan because it meets his minimum balance requirement, has no monthly fee with direct deposit, and has no ATM fees.
Examples
Choosing the right bank account is similar to selecting the best tool for a job. Just as a carpenter needs to consider the cost and functionality of different tools, Nathan needs to evaluate the fees and features of various bank accounts to find the one that best suits his financial needs. By understanding the terms and conditions of each account, Nathan can make an informed decision that saves him money and provides the services he needs, such as ATM access and direct deposit. This careful evaluation ensures he gets the most value from his $300, just like a carpenter maximizes the use of their tools and resources.
