The ability to access funds without a penalty helps to explain why certificates of deposit (CDs) have gained popularity among conservative investors and savers.

Question

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A certificate of deposit is a time deposit that earns interest. You commit to depositing your money in the bank for a set amount of time, which can vary anywhere from three months to a few years. Depositors who hold certificates of deposit agree not to withdraw any of the funds in the account prior to the certificate's maturity date.

The Ability to Access Funds Without a Penalty Helps to Explain