40.3k views
4 votes
6 An advantage of a ______ is that it allows a long-term deposit to grow during its term at a high rate of interest. bond checking account certificate of deposit regular savings account

1 Answer

3 votes

A time deposit is an interest-bearing bank account that has a pre-set date of maturity. A certificate of deposit (CD) is the best-known example. The money must remain in the account for the fixed term in order to earn the stated interest rate.

Time deposits generally pay a slightly higher rate of interest than a regular savings account. The longer the time to maturity, the higher the interest payment will be.

Another name for this type of investment is term deposit

User Lights
by
7.9k points

No related questions found