10
QuizMultiple Choice

Banking: How to Manage Your Money

Question 10 • * HSA 26-27 Economics

In which situation would a savings bond be the best investment to earn interest?

Answer
A
if you need access to your cash quickly
B
if you are saving each month for a new car
C
if you are putting aside a chunk of money to purchase a house in five years
D
saving to pay a tax bill in four months

Explanation

A savings bond is generally best for money you can leave invested for several years, since cashing it early may limit the interest you earn. Putting aside a chunk of money for a house purchase in five years gives the bond time to earn interest. The other choices involve needing quick access to the money or saving for a shorter-term expense.

AI-written and checked against the verified answer.

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