Certificates of deposit are sometimes less suitable for college students due to the potential length of the deposit and penalties if you withdraw early. True or false?

Question

Catherine Bird

Business

15 September, 14:24

Certificates of deposit are sometimes less suitable for college students due to the potential length of the deposit and penalties if you withdraw early. True or false?

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Answers (1)

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Memphis Kemp · Answer 1

Answer: FALSE

Explanation: Certificate of deposit are a form of securities offered by the banks and credit unions. The banks offer interest rates to those willing to deposit their money in such securities for a predetermined period and withdrawing the money will result in penalty.

However, the penalty is one of the con of this security, the maturity period is not a major problem. Individual like college students can invest their money in COD's with maturity of 30 to 60 days. The maturity period of these security is between 30 days to five years.

Hence, the given statement is false.