Which interest-bearing account is best for people who won’t need access to their money for several months or longer?
A. Checking Account
B. Savings Account
C. Credit card
D. Certificate of Deposit
Which interest-bearing account is best for people who won’t need access to their money for several months or longer?
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The correct answer is D. Certificate of Deposit.
A Certificate of Deposit (CD) is best for people who won’t need access to their money for several months or longer because it typically offers a higher interest rate than savings accounts, but requires you to lock in your funds for a specific term (such as 6 months, 1 year, or more). This means you won’t be able to withdraw the money without a penalty until the term ends, making it suitable for funds that you can afford to set aside. Checking accounts and credit cards do not offer interest, while savings accounts offer lower interest rates compared to CDs.
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