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 tiered interest rates.
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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 or debit card.
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Detailed explanation-1: -A certificate of deposit (CD) is defined as an investment instrument mostly issued by banks, requiring investors to lock in funds for a fixed term to earn premium rates. It is like a savings account. For example, Joe invested $5, 000 in CD with a bank at a fixed interest rate of 5% with 5 years maturity.
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: -Certificate of Deposit or CD is a fixed-income financial instrument governed under the Reserve Bank and India (RBI) issued in a dematerialized form. The amount at payout is assured from the beginning. A CD can be issued by any All-India Financial Institution or Scheduled Commercial Bank.
Detailed explanation-4: -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-5: -Maturity Period: A Certificate of Deposit issued by the commercial banks can have maturity period ranging from 7 days to 1 year. For financial institutions, it ranges is from 1 year to 3 years.