Which term refers to a savings instrument with a fixed term and interest rate, typically issued by banks?

Which term refers to a savings instrument with a fixed term and interest rate, typically issued by banks?

• A. Certificate of Deposit (CD)
• B. Budget
• C. Charitable Contributions
• D. Delayed Gratification

Answer: (A)

A certificate of deposit, or CD, is a savings instrument that has a fixed term and a fixed interest rate and is typically issued by banks. You deposit money for a set period, and the rate is locked in for that term, which often earns more than a regular savings account. CDs are insured by the FDIC up to standard limits, adding a safety feature to the guaranteed return. Because it requires keeping the money deposited for the agreed time, early withdrawal usually incurs a penalty, which is part of why the rate can be higher. Other options don’t fit this description: a budget is a plan for spending and saving, not a savings instrument; charitable contributions are donations; delayed gratification is the behavior of waiting for a reward, not a financial product.

A certificate of deposit, or CD, is a savings instrument that has a fixed term and a fixed interest rate and is typically issued by banks. You deposit money for a set period, and the rate is locked in for that term, which often earns more than a regular savings account. CDs are insured by the FDIC up to standard limits, adding a safety feature to the guaranteed return. Because it requires keeping the money deposited for the agreed time, early withdrawal usually incurs a penalty, which is part of why the rate can be higher.

Other options don’t fit this description: a budget is a plan for spending and saving, not a savings instrument; charitable contributions are donations; delayed gratification is the behavior of waiting for a reward, not a financial product.