An account at a bank that carries a fixed maturity date,with a fixed interest rate,and which often carries a penalty for early withdrawal of money is called a:
A)demand deposit.
B)transaction deposit.
C)time deposit.
D)money market mutual deposit.
E)None of the options is correct.

Question

Quizplus · Accepted Answer

A time deposit is a type of account that requires the account holder to leave their funds in the account for a set period of time, known as the maturity date, in order to earn a fixed interest rate. This type of account typically carries penalties for early withdrawal of funds. Thus, option C is the correct answer. Option A, demand deposits, is a type of deposit account that allows for withdrawals at any time without penalty. Option B, transaction deposits, is a broader term that encompasses various types of deposit accounts that facilitate financial transactions, including demand deposits. Option D, money market mutual deposits, are investment accounts that are not typically held at traditional banks, but rather are managed by mutual fund companies or other financial institutions.

An Account at a Bank That Carries a Fixed Maturity