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The Ultimate Certificates of Deposit Quiz
by Staff
Certificates of deposit or CDs offer a higher interest alternative to low interest savings accounts. However, if you need your funds available to you on a moment's notice, CDs may not be right for you. The early-withdrawal fee might be a deal-breaker. Take our quiz and find out if CDs are the right investment for your needs.

The interest rate on savings accounts tends to be:

  • low
  • high
  • unfair

Stocks are usually considered _____risk investments.

  • low
  • high
  • no

Certificates of deposit (CDs) offer a _____ interest rate than savings accounts.

  • lower
  • higher
  • fairer

The penalty for withdrawing money from a CD before its maturity date is called:

  • an early withdrawal fee
  • a late-withdrawal fee
  • a deposit-withdrawal fee

Certificates of deposit are a great long-term investment to fund expenses such as:

  • college tuition
  • retirement
  • both of the above

Insurance that protects the money you have in bank accounts and CDs is provided by:

  • the County Deposit Insurance Corporation
  • the State Deposit Insurance Corporation
  • the Federal Deposit Insurance Corporation

Which type of interest increases each time its taken?

  • simple interest
  • compound interest
  • fixed interest

Which of the following terms represents the simplest interest rate at the start of a year?

  • the annual percentage rate
  • the annual percentage yield
  • the annual percentage credit

CD laddering means dividing up your funds and investing different amounts in different:

  • CDs
  • money market accounts
  • savings accounts

It's a good idea to avoid taking _____while holding a CD.

  • a bus
  • a loan
  • a vacation