ECONOMICS
SAVING AND INVESTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Funds deposited in a CD are held for a certain length of time.
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Funds deposited in a CD have lower Interest than a Savings Account.
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Funds deposited in a CD are very liquid.
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Funds deposited in a CD can be accessed via check/ATM.
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Detailed explanation-1: -Certificate of deposit (CD) is an agreement between the depositors and the authorized bank or financial institution. This agreement is for a specific period of time with a certain amount of money to invest where the financial institution pays interest. You can redeem at the time of maturity of the instrument.
Detailed explanation-2: -A certificate of deposit (CD) is a savings account that holds a fixed amount of money for a fixed period of time, such as six months, one year, or five years, and in exchange, the issuing bank pays interest. When you cash in or redeem your CD, you receive the money you originally invested plus any interest.
Detailed explanation-3: -Definition: A certificate of deposit (CD) is a short-term security with a fixed interest rate and maturity date issued by a bank that seeks to raise funds from the secondary money market.
Detailed explanation-4: -Negotiable certificates of deposit are CDs with a minimum face value of $100, 000. They are guaranteed by banks, cannot be redeemed before their maturation date, and can usually be sold in highly liquid secondary markets. Along with U.S. Treasury bills, they are considered a low-risk, low-interest security.
Detailed explanation-5: -Key Takeaways A time deposit is an interest-bearing bank account that has a date of maturity, such as a certificate of deposit (CD). The money in a time deposit must be held for the fixed term to receive the interest in full. Typically, the longer the term, the higher the interest rate that the depositor receives.