Question

Which savings account can a financial institution end?

Answer 1

The correct answer is 'callable certificate of deposit’. Financial institutions can recall these before they reach maturity. This avoids financial institutions having to pay more if interest rates go down.

Answer 2

The correct answer is:

callable certificate of deposit

Explanation:

A caallable certificate of deposit is a certificate of deposit (CD), insured by the FDIC, that contains a call feature. Callable CDs can be redeemed (called away) early by the bank before maturity, usually within a given time frame, and at a predetermined call price.

A callable security is one that can be redeemed early by the issuer, especially during times of decreasing interest rates. This helps banks save money by not continuing to pay higher interest rates on CDs when rates go down.