Saving vs. Investing

A bank account that allows you to deposit/withdraw money at any time and earns interest is a

• money market fund

• money market deposit account

• regular savings account

• certificate of deposit

The ability to quickly turn an investment into cash is called

• liquidity

• rate of return

• inflation risk

• interest

What is the date when money deposited into a Certificate of Deposit (CD) becomes available called?

• maturity date

• liquidity

• rate of return

• savings

The interest rate on a CD is __________ than that on a regular savings account.

• Lower

• Higher

• Same

• Does not earn interest

If you cash in a CD before the maturity date you will __________ and __________. (select 2)

• pay a penalty

• pay the interest

• lose interest

• lose the principal

You earn _______________ by saving money in a savings account.

• money

• interest

• awards

• trophies

Which account is used for a fixed period of time and allows restricted access to the funds?

• Checking Account

• Savings Account

• Money Market Deposit Account

• Certificate of Deposit

Which account do you usually have to deposit a minimum amount to open the account (typically $1,000)?

• Checking Account

• Savings Account

• Money Market Deposit Account

• Certificate of Deposit

In relation to the other options, how liquid is a savings account?

• More liquid than cash
• Less liquid than mutual funds
• More liquid than a Certificate of Deposit
• More liquid than a checking account

Which of the following is a feature of a certificate of deposit (CD)?

•  Funds deposited in a CD are held for a certain length of time.
• Funds deposited in a CD have tiered interest rates.
•  Funds deposited in a CD are very liquid.
• Funds deposited in a CD can be accessed via check or debit card.