Question

Although buying a Certificate of Deposit can earn your higher returns than a regular savings account, it can have the negative side effect of _________. a. Needing frequent transfers to stay active b. Requiring a high initial investment c. Being taxed when invested and when withdrawn d. Having to be tied to a fixed rate saving account..

Answer 1

The correct answer is B) requiring a high initial investment.

Although buying a Certificate of Deposit can earn you higher returns than a regular savings account, it can have the negative side of effect of requiring a high initial investment.

When deciding on making a good investment move, a Certificate of Deposit is an option. This investment instrument is a savings certificate with a fixed date for renovation. It has a fixed interest rate. It can pay high return but you cannot access the money until the maturity day. Although a Certificate of Deposit gives higher interest rates to the investor that a common saving account, it has a negative: it requires a high initial amount of money to invest.

Answer 2

D. Having to be tied to a fixed rate savings account.