Which account typically offers the highest interest rate but restricts access to funds for a set period?

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

Answer: (B)

A certificate of deposit is a time deposit where you commit to leaving your money deposited for a set period in exchange for a higher interest rate. Because your funds are not readily accessible, the bank can pay more interest since it doesn’t have to plan for quick withdrawals. If you take money out early, you typically pay a penalty, which protects the bank and discourages breaking the term.

This is why it fits the prompt best: you get the highest rate among common deposit accounts, but access is restricted for the term of the CD. In contrast, money market and savings accounts offer some access to funds and generally lower rates, and checking accounts usually earn little or no interest but provide immediate access.