When purchasing a certificate of deposit (CD),
A) you are always better off to buy the longer-term CDs.
B) you will earn more interest percentage-wise on the lower dollar CDs.
C) the amount you invest is at risk, so choose carefully.
D) it is wise to shop around as rates vary among financial institutions.

Question

Quizplus · Accepted Answer

The interest rates on CDs can vary significantly among different banks and financial institutions, so it's beneficial to compare rates to find the best deal. Longer-term CDs do not always offer the best returns, especially in fluctuating interest rate environments. The interest rate does not typically depend on the dollar amount of the CD, and the principal amount invested in CDs is generally insured up to $250,000 per depositor, per insured bank, by the FDIC in the United States, making them a low-risk investment.

When Purchasing a Certificate of Deposit (CD)