ECONOMICS
SAVING AND INVESTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
No risk
|
|
|
No fees as long as you keep it in until the maturity date
|
|
|
Simple
|
|
|
Offers higher interest rates than savings accounts
|
|
|
Able to use a debit card to withdraw money
|
Detailed explanation-1: -Compared to savings accounts or money market accounts, CDs potentially can offer higher interest rates on deposits. That’s because you agree to keep your money in the CD for a set time period. The interest rate and APY you earn depends on the bank, the CD term and the current interest rate environment.
Detailed explanation-2: -Better interest rates: Since the whole idea of a CD is to leave your money untouched for a set amount of time, banks offer higher interest rates than for a savings account. CD rates can be up to six times higher than the national average for savings accounts.
Detailed explanation-3: -MMAs and CDs both offer higher interest rates than traditional savings accounts. MMAs typically have a higher initial deposit and monthly balance requirements than savings accounts. CDs require that you leave your money untouched for a fixed amount of time.
Detailed explanation-4: -The most significant advantage of a CD is the interest rate. CDs typically offer a higher interest rate than savings accounts, meaning you can earn more money on your deposit. This can be helpful if you are trying to save for a specific goal, such as a down payment on a house or retirement.
Detailed explanation-5: -Higher rates: Saving in a CD could potentially yield a higher interest rate and APY compared to a savings account. The rates you can earn with a CD can depend on where you open it and the type of account. Guaranteed returns: CD accounts can offer fixed rates to savers.