What is the primary characteristic of a Certificate of Deposit (CD)?

A) It offers instant access to funds without penalty.

B) It provides a variable interest rate that fluctuates with the market.

C) It locks in a fixed interest rate for a predetermined period.

D) It functions like a checking account for daily transactions.

Explanation

A Certificate of Deposit (CD) is a savings certificate with a fixed maturity date and a fixed interest rate. Savers agree to leave their money in the account for a specific period to earn the promised interest, often incurring a penalty for early withdrawal.

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