Question

ava is looking for a safe and secure way to save money for her future goals. After discussing her options with a financial advisor, she learns about a Certificate of Deposit (CD). What is the primary purpose of a Certificate of Deposit (CD)?








To earn a fixed rate of interest over a specific period

To minimize risk through diversification

To provide a flexible investment option








Answers

GPT-4o mini
The primary purpose of a Certificate of Deposit (CD) is **to earn a fixed rate of interest over a specific period**. CDs are time deposits offered by banks and credit unions, where money is deposited for a predetermined time frame at a fixed interest rate, offering a relatively safe way to save money while accruing interest.