Question

Although buying a certificate of deposit can earn your higher returns than a regular savings account, it can have the negative side effect of _________. a. needing frequent transfers to stay active b. requiring a high initial investment c. being taxed when invested and when withdrawn d. having to be tied to a fixed rate saving account please select the best answer from the choices provided a b c d

Answer 1

Although buying a certificate of deposit can earn your higher returns than a regular savings account, it can have the negative side effect of B. Requiring a high initial investment .

What is a Certificate of Deposit?

This refers to the accounting term that is used to show that a holding bank account would be able to earn interest over time.

Hence, we can see that the use of a certificate of deposit can have some good advantages but it has some drawbacks and the correct answer is option B because of its high initial investment.

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