A savings plan requiring a stated amount to remain on account for a fixed period of time?

A savings plan requiring a stated amount to remain on account for a fixed period of time?

• A. Certificate of Deposit
• B. Savings Account
• C. Money Market
• D. Annuity

Answer: (A)

The key idea is locking funds for a set period in exchange for a fixed return. A certificate of deposit fits this: you deposit a specific amount for a fixed term (months or years) and earn a fixed interest rate. If you withdraw early, you typically pay a penalty, which protects the term and rate structure. This differs from a savings or money market account, which emphasizes liquidity and may have variable rates and easier access to funds. An annuity, meanwhile, is an insurance contract designed for future income rather than a short‑term savings vehicle. So the description matches a certificate of deposit.

The key idea is locking funds for a set period in exchange for a fixed return. A certificate of deposit fits this: you deposit a specific amount for a fixed term (months or years) and earn a fixed interest rate. If you withdraw early, you typically pay a penalty, which protects the term and rate structure. This differs from a savings or money market account, which emphasizes liquidity and may have variable rates and easier access to funds. An annuity, meanwhile, is an insurance contract designed for future income rather than a short‑term savings vehicle. So the description matches a certificate of deposit.