Which type of account typically offers competitive interest rates on the unused cash portion of a portfolio?

• A. Checking account
• B. FX account
• C. Brokerage account
• D. High-yield savings account

Answer: (C)

The correct choice is a high-yield savings account, as this type of account is specifically designed to offer higher interest rates on deposited funds compared to standard savings accounts. High-yield savings accounts are typically offered by online banks or financial institutions and allow investors to earn a competitive return on their unused cash. This makes them an attractive option for individuals who want to keep their cash liquid while still earning interest.

Other account types mentioned in the question, such as checking accounts, usually have lower interest rates and may even offer none at all, making them less beneficial for earning interest on cash. An FX account, relating to foreign exchange trading, does not focus on providing interest for cash; its main purpose is to facilitate currency trading. While a brokerage account may have options for cash management, they typically do not compare to the competitive rates of high-yield savings accounts.