Income Beginner: Introduction to Certificates of Deposit (CDs)

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1.
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.
2.
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.
3.
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.
4.
Compounding makes a yield _______ simple interest/dividends.
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Higher than. Compounding gives you additional earnings on top of the earnings youve already received.
5.
If you withdraw your money from a certificate of deposit before the maturity date, you will typically be penalized three to six months interest/dividends.
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True. On the average, the penalty is three to six months worth of earnings.