Janice Sanders plans on saving $12,000 for 3 years until she returns to college for her master's degree in personal financial planning.She would like to receive a fixed rate of return over that period.Which of the following would you recommend?

Question

Quizplus · Accepted Answer

Since Janice plans to save for 3 years, the best option would be a 3-year certificate of deposit (CD) as it typically offers the highest fixed rate of return among the listed options. Money market deposit accounts typically offer lower rates of return and are better suited for short-term savings. 1-year CDs are not long enough to meet Janice's 3-year timeline. Series EE U.S. savings bonds may offer competitive rates of return, but their rates are subject to change, and they have penalties for early withdrawal. Therefore, option C, a 3-year CD, would provide a predictable and fixed rate of return without any risk.

Janice Sanders Plans on Saving $12,000 for 3 Years Until