Which savings product requires keeping funds deposited for a fixed term to earn interest?

• A. Balance
• B. Bank Statement
• C. Check Register
• D. Certificate of Deposit (CD)

Answer: (D)

A certificate of deposit is a savings product that requires you to commit funds for a specific period in order to earn interest. When you open a CD, you deposit money for a fixed term—months or years—and the interest rate is set for that term. You earn the stated interest only if you leave the money deposited until the term ends; taking it out early usually leads to a penalty, which reduces your earnings. CDs typically offer higher interest than regular savings accounts because you give up liquidity for a higher guaranteed return. The other options are not savings products designed to earn interest: a balance is just the amount of money in an account, a bank statement is a transaction report, and a check register is a personal record of checks written and deposits.