Question

What is NOT true about a certificate of deposit?

Select the best answer from the choices provided.
It is a secure investment with a good interest rate.

It forces a customer to leave the money for a specific period of time.

It has a higher interest rate than savings accounts and money market accounts.

It has a good interest rate and easy access to the money.

Answer 1

A certificate of deposit (CD) is a time deposit, a financial product commonly sold in the United States and elsewhere by banks, thrift institutions, and credit unions.

CDs are similar to savings accounts in that they are insured and thus virtually risk free; they are "money in the bank". In the USA, CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions. They are different from savings accounts in that the CD has a specific, fixed term (often one, three, or six months; or one to five years) and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.

In exchange for keeping the money on deposit for the agreed-on term, institutions usually grant higher interest rates than they do on accounts from which money may be withdrawn on demand, although this may not be the case in an inverted yield curve situation. Fixed rates are common, but some institutions offer CDs with various forms of variable rates. For example, in mid-2004, interest rates were expected to rise, many banks and credit unions began to offer CDs with a "bump-up" feature. These allow for a single readjustment of the interest rate, at a time of the consumer's choosing, during the term of the CD. Sometimes, CDs that are indexed to the stock market, the bond market, or other indices are introduced. ......... so id say B cause that isnt in all situations :D i know this is a lot to read O_O

Answer 2

thnx a bunch man!