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Types of CD Question and answers correctly solved

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Types of CD Question and answers correctly solved Types of CD's Traditional CD - correct answer You recieve a fixed interest rate over a specific period of time. When that term ends, you can withdraw your money or roll it into another CD. Withdrawing before maturity can result in a hefty p...

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  • November 15, 2024
  • 1
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • types of cd
  • types of cd question and answers correctly solve

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  • CD
  • CD

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flyhigher329

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Types of CD's
Traditional CD - correct answer ✔You recieve a fixed interest rate over a
specific period of time. When that term ends, you can withdraw your money or
roll it into another CD. Withdrawing before maturity can result in a hefty
penalty.


Bump-up CD - correct answer ✔This kind of account allows you to swap
your CD's interest rate for a higher one of rates on new CD's of similar
duration rise during your investment period. Most institutions that offer this
type of CD let you bump up once during the term of your CD and keep the
interest rate for the remainder of the original CD's term.


Liquid CD - correct answer ✔This kind of account allows you to withdraw
part of your deposit without paying a penalty. The interest rate on his CD
usually is a little lower than others, but the rate is still higher than the rate in a
money market account.


Zero-coupon CD - correct answer ✔His kind of Cd does not pay our annual
interest and instead reinvests the payments so you earn higher in a higher
total deposit.


Callable CD - correct answer ✔A bank that issues this kind of CD can recall
it after a set period, returning your deposit plus any interest owed.


Brokered CD - correct answer ✔This term refers to any CD offered by a
brokerage. Brokerages have access to thousands of banks CD offer ending,
including online banks. These CD's will carry a higher rate of interest from
online and smaller banks because they're competing nationally for depositors
dollars. However, you'll pay a fee to purchase the account.

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