Question

what is an early withdrawal penalty? *
a. a fee incurred when you take money out of a traditional savings account more than six times per statement cycle.

b. the loss of purchasing power if inflation is higher than your apy.

c. a fee for closing a savings account within the first year of opening it.

d. a payment you must make if you take money from a certificate of deposit (cd) before its maturity date.

what is a characteristic of a high yield account? *
a. they are often found at online - only banks because the savings from no physical building are passed along

b. they typically offer paltry interest rates, sometimes as low as 0.01 percent.

c. they are retirement accounts geared strictly towards saving for the future.

d. they come with an atm card and checks, like a checking account.

Explanation:

First Question: What is an Early Withdrawal Penalty?

• Option A: The fee for excessive withdrawals from a traditional savings account (more than six times per statement cycle) is a different type of fee, not an early withdrawal penalty for CDs or similar time - based accounts.
• Option B: Loss of purchasing power due to inflation being higher than APY is related to inflation and interest rate dynamics, not an early withdrawal penalty.
• Option C: A fee for closing a savings account within the first year is not the typical definition of an early withdrawal penalty (which is more related to withdrawing from time - deposit accounts before maturity).
• Option D: A Certificate of Deposit (CD) has a maturity date, and if you withdraw money from it before that date, you have to pay an early withdrawal penalty. This matches the definition of an early withdrawal penalty.

• Option A: Online - only banks often have lower operating costs (no physical branches), so they can offer higher interest rates on high - yield accounts and pass those savings to customers. This is a common characteristic of high - yield accounts.
• Option B: High - yield accounts, by definition, offer relatively high interest rates, not paltry (very low) rates.
• Option C: High - yield accounts are not strictly retirement accounts. Retirement accounts have different characteristics and tax implications.
• Option D: High - yield accounts are typically savings - type accounts and do not come with ATM cards and checks like checking accounts.

Answer:

D. A payment you must make if you take money from a Certificate of Deposit (CD) before its maturity date.

Second Question: What is a characteristic of a High Yield Account?