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katen-ka-za [31]
3 years ago
15

A certificate of deposit that changes the rate of interest based on the prevailing market interest rate is known as a: A Market

rate CD B Step-up / Step-down CD C Negotiable CD D Renewable CD
Business
1 answer:
8090 [49]3 years ago
4 0

Answer:

B. Step-up/Step-down CD

Explanation:

A bank certificate of deposit (CD) can be defined as a secured form of time-bound deposit and a special low-risk savings account, wherein money (lump-sum) are left with the bank for a specific period of time in exchange for an interest rate premium.

Generally, a certificate of deposit pays a higher interest rate to its holder than the regular savings account because the banks invest the money in a business.

Additionally, the bank certificate of deposit is protected and insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000.

A Step-up/Step-down certificate of deposit (CD) is a type of CD that changes the rate of interest for a deposit based on the prevailing market interest rate.

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