Answer
The interest rate for a certificate of deposit surpasses that of a savings account because the funds are kept by banks for a longer duration. What exactly are a certificate of deposit and a savings account? A certificate of deposit (CD) is a financial tool provided by banks wherein customers agree to deposit a certain amount for a defined period without making withdrawals. CDs usually have longer terms compared to savings accounts, and the interest increases with a longer duration. Conversely, a savings account is a type of financial product that enables the account holder to deposit and withdraw funds at any time. The typical interest rate for a savings account is about 0.50%, which is lower than that of a CD. Thus, it’s evident that CDs yield a higher interest rate due to their extended term compared to savings accounts. Consequently, the correct choice is B.
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