ECONOMICS
FINANCIAL MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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require only a small investment and pay high interest rates at maturity
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require only a small investment and have various maturity dates
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are issued and insured by commercial banks
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are issued and insured by the U.S. government
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Detailed explanation-1: -Why Would I Open a CD? Unlike most other investments, CDs offer fixed, safe-and generally federally insured-interest rates that can often be higher than the rates paid by many bank accounts. And CD rates are generally higher if you’re willing to sock your money away for longer periods.
Detailed explanation-2: -While many certificates of deposit have no minimum investment requirement, some do-of $500, $1, 000, or more. CDs are commonly purchased through banks, credit unions or similar financial institutions.
Detailed explanation-3: -A CD, or certificate of deposit, is a type of savings account with a fixed interest rate that’s usually higher than a regular savings account. It also has a fixed term length and a fixed date of withdrawal, known as the maturity date. You lock funds in a CD for a term generally ranging from three months to five years.
Detailed explanation-4: -A certificate of deposit (CD) is called a “term deposit” because the depositor agrees to keep it with a financial institution for a specified amount of time. The end of that fixed term, whether it’s six months or 60 months, is called the maturity date.