Savings accounts and term deposits are categorized as what?

• A. Investment risk
• B. Interest-earning investments
• C. Shares/stocks investment
• D. Property investment

Answer: (B)

Savings accounts and term deposits are instruments that generate a return through interest. They’re considered interest-earning investments because their primary function is to pay you interest on the money you keep with a bank, rather than aiming for capital gains or ownership of an asset. These products are typically low risk and cash-like: a savings account offers liquidity and easy access to funds, while a term deposit locks your money in for a set period in exchange for a fixed rate. They aren’t shares or real estate, which involve ownership or potential for price swings, nor are they primarily about growth through capital appreciation. The defining feature here is earning interest, which is exactly what makes them fit the category of interest-earning investments.