Income Beginner: Introduction to Certificates of Deposit (CDs)

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1.
The length of time for which a certificate of deposit stays in the financial institution contributes to the size of its interest or dividend rate.
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True. Length of time is one factor among many that determine interest or dividend rates.
2.
If you want to increase the deposit on your CD periodically, you can do so by buying _________.
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An add-on CD. With an add-on CD, you can add funds throughout the life of the CD.
3.
To be quoted on the NASDAQ, a negotiable certificate of deposit must have a maturity of at least _______.
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14 days. This is the minimum maturity.
4.
You can buy negotiable certificates of deposit in any amount.
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False. You can buy them only in amounts over $100,000.
5.
A certificate of deposit of ________ is called a small-savings CD.
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Less than $100,000. Small-savings CDs exist only in amounts less than $100,000.