🔵 5-3 Comparing Savings Plans | Instruction

What is a key feature of a high-yield savings account compared to a regular savings account?

• It is only available at physical banks.

• It requires a higher minimum balance.

• It has no fees.

• It offers lower interest rates.

What is the main purpose of a savings plan?

• To set aside money for future goals

• To buy expensive items

• To spend money quickly

• To avoid paying taxes

What is a benefit of a certificate of deposit (CD)?

• You can withdraw money anytime without penalties.

• It has no fixed term.

• It offers higher interest rates than regular savings accounts.

• It is not insured by the FDIC.

What is a key feature of a certificate of deposit (CD)?

• It is not insured by the FDIC

• It allows unlimited withdrawals

• It has a fixed term and interest rate

• It offers no interest

What is a characteristic of money market accounts?

• They have lower interest rates than regular savings accounts.

• They are not insured by the FDIC.

• They offer check writing and debit card access.

• They have no minimum balance requirements.

What is a feature of U.S. savings bonds?

• They are high-risk investments.

• They are not backed by the government.

• They offer tax benefits.

• They have no minimum holding period.

What does liquidity refer to in the context of savings plans?

• The ability to access funds quickly without penalty.

• The interest rate of the account.

• The safety of the investment.

• The tax benefits of the account.

Which type of account typically offers higher interest rates than a regular savings account?

• Promotional CD

• Basic savings account

• Money market account

• Checking account

What is a benefit of U.S. savings bonds?

• They are high risk

• They are not backed by the government

• They offer tax benefits

• They have no holding period

What does liquidity refer to in the context of savings plans?

• The amount of interest earned

• The ease of accessing funds without penalty

• The safety of the investment

• The tax rate applied