Question

sarah is a high school senior who received $2,500 from her grandparents to use specifically for college textbooks and supplies when she starts next fall. she is 100% sure she wont need the money for at least 10 months. she wants to make sure the money is safe and that it earns the highest interest possible during that 10 - month period, as she wont be adding any more money to the account and wont need to withdraw it early. she is looking for an account where her money is essentially \locked away\ for a set time.
which type of savings account is best for sarah?
○ traditional savings account
○ online savings account
○ certificate of deposit
○ money market account
marcus is 16 and just got his first part - time job. he wants a simple, easy - to - access account at his local bank branch where he can deposit $50 from every paycheck. he isnt worried about earning the highest interest rate, but he needs an account that is fdic insured and that allows him to make deposits regularly without any transaction fees. he might need to quickly take money out once a

Explanation:

For Sarah's situation: A Certificate of Deposit (CD) requires depositing money for a fixed term (she wants it "locked away" for 10 months) and typically offers higher interest than traditional or online savings accounts (when not needing early withdrawal). Traditional savings accounts are more liquid, online savings have moderate interest but less "lock - in", and money market accounts have some liquidity. So CD fits her need for safety, highest interest, and fixed - term locking.

Answer:

C. Certificate of Deposit