ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Restricted access to your money
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Debit card included
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Withdrawal penalty if cashed before expiration date
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None of the above
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Detailed explanation-1: -You might be charged the equivalent of three months’ interest for an early withdrawal from a CD that matures in six months or less. If you have a five-year CD, the penalty might be 12 months’ worth of interest or more.
Detailed explanation-2: -With a Roth IRA CD, you can withdraw your contributions at any time, but you’ll pay the 10% IRS penalty if you withdraw your earnings before the account is at least five years old and you’re at least age 59½.
Detailed explanation-3: -Once the CD matures, you may have a grace period, established by the bank, to decide whether to renew the CD or withdraw the funds. The bank will pay interest, if any, once the CD matures in accordance with your account agreement and bank policy during the grace period.