What is a Certificate of Deposit (CD)

Multiple Choice

A Certificate of Deposit (CD) is best described as:

• A music record

• A special type of savings account with a fixed interest rate

• A bank credit card 

• A government document

Multiple Choice

 When you open a CD, what are you promising the bank?

• To never withdraw money

• To leave your money for a specific time period

• To pay the bank extra fees

• To tell all your friends about the bank

Multiple Choice

6. Which statement best describes how CD interest works?

• You lose money the longer you keep funds in the CD

• Interest rates stay the same no matter how long you save

• Banks randomly decide interest rates

• The more money you earn, the more interest you earn

Multiple Choice

Why might someone choose to open a CD?

• To earn more interest than a regular savings account

• To get free gifts from the bank

• To impress their friends

• To avoid paying taxes

Multiple Choice

5. How does the government help protect money in CDs?

A) By giving everyone free money

B) By guaranteeing deposits up to $250,000

C) By creating special CD accounts

D) By running the banks

• By giving everyone free money

• By creating special CD accounts

• By running the banks

• By guaranteeing deposits up to $250,000

Multiple Choice

What is an important factor when considering opening a CD?

• How fancy the bank looks

• How close the bank is to your house

• The bank's decorations

• The minimum deposit amount

Multiple Choice

 What happens if you take money out of a CD before it matures?

• Nothing happens

• The bank gives you bonus money

• You typically have to pay a penalty fee

• You get a free toaster

Multiple Choice

If someone wants a safer way to save money, a CD is good because:

A) You can spend the money anytime

B) The interest rate changes frequently

C) The return is predictable and guaranteed

D) Banks give you free investments

• The return is predictable and guaranteed

• The interest rate changes frequently

• You can spend the money anytime

• Banks give you free investments

Multiple Choice

The primary purpose of a CD is to:

A) Make the bank rich

B) Help people save money safely

C) Create complicated financial documents

D) Confuse young savers

• Make the bank rich

• Help people save money safely

• Create complicated financial documents

• Confuse young savers