Which term represents a savings instrument that bears interest and is commonly insured by the FDIC, with a maturity date?

• A. Budget
• B. Certificate of Deposit (CD)
• C. Charitable Contributions
• D. Delayed Gratification

Answer: (B)

A certificate of deposit is a time deposit that earns interest, is insured by the FDIC, and has a fixed maturity date. In a CD, you commit to leave your money deposited for a set term at a stated interest rate, so your return is known by the end of the term. The FDIC insurance protects the principal up to the standard limit if the bank fails, making CDs a safe way to grow savings. The maturity date means access to the funds is restricted until that date, often with penalties for early withdrawal, which explains why CDs typically offer higher rates than regular savings accounts.

Other options describe things that aren’t savings instruments: a budget is a spending plan, charitable contributions are gifts, and delayed gratification is a behavior concept rather than a financial product.