Which savings product earns interest on a lump sum deposited for a fixed term?

• A. Check
• B. Certificate of Deposit (CD)
• C. Balance
• D. Interest Rate

Answer: (B)

A certificate of deposit fits this description because it involves depositing a lump sum for a fixed term and earning interest at a set rate for that period. The longer the term, typically the higher the rate, and withdrawing earlier usually incurs a penalty, reflecting the trade-off for the guaranteed, fixed return. A check is a payment instrument and doesn’t earn interest. A balance is simply the amount of money in an account, not a product. An interest rate is the percentage earned, not a savings product.