Question

what is a benefit of choosing certificates of deposit instead of bank savings accounts?

there are no penalties for early withdrawals.

minimum deposit amounts are waived for new cds.

the money will typically earn interest at a higher rate.

certificates of deposit help investors reach short - term goals

Explanation:

To determine the benefit of certificates of deposit (CDs) over bank savings accounts, we analyze each option:

• "There are no penalties for early withdrawals": CDs typically have penalties for early withdrawal, while savings accounts usually don't have such strict penalties for early access. So this is incorrect.
• "Minimum deposit amounts are waived for new CDs": CDs often have minimum deposit requirements, and this statement is not a typical benefit of CDs over savings accounts. So this is incorrect.
• "The money will typically earn interest at a higher rate": CDs generally offer higher interest rates than regular savings accounts in exchange for the depositor agreeing to keep the money in the account for a fixed term. This is a key benefit of CDs.
• "Certificates of deposit help investors reach short - term goals": CDs are usually for fixed terms (which can be short - term, but also medium to long - term), and they are not specifically better at helping with short - term goals compared to savings accounts. Also, the main benefit related to the comparison with savings accounts is the interest rate, not goal - reaching for short - term. So this is incorrect.

Answer:

The money will typically earn interest at a higher rate.