What characterizes a money market account?

A money market account is characterized by its ability to offer higher interest rates in exchange for maintaining larger balances. This type of account combines features of savings accounts and checking accounts, which makes it a popular choice for individuals looking to earn a better return on their savings while still keeping access to their funds.

Money market accounts often provide tiered interest rates, meaning that the more money you deposit, the higher the rate you may receive. This incentivizes account holders to save larger amounts, as the benefit of earning interest increases with the balance. This feature is key to understanding why option B is the most accurate representation of the characteristics of a money market account.

While it is true that some money market accounts may limit the number of withdrawals, the focus on higher interest rates for larger balances is more defining of the account type. Additionally, requirements like minimum balances can vary among different institutions and are not universal to all money market accounts, making other options less universally applicable.