What is the maximum term for Town investments in a Certificate of Deposit?

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Multiple Choice

What is the maximum term for Town investments in a Certificate of Deposit?

A CD is a time deposit, so the town’s investment policy sets how long funds can be tied up. For Town investments in a Certificate of Deposit, the maximum maturity allowed is three years. This cap balances earning potential with the need to keep funds fairly liquid and manage interest-rate risk. Within that limit, shorter terms like one or two years are possible, but extending to longer periods such as five years isn’t permitted by typical municipal guidelines.

A CD is a time deposit, so the town’s investment policy sets how long funds can be tied up. For Town investments in a Certificate of Deposit, the maximum maturity allowed is three years. This cap balances earning potential with the need to keep funds fairly liquid and manage interest-rate risk. Within that limit, shorter terms like one or two years are possible, but extending to longer periods such as five years isn’t permitted by typical municipal guidelines.

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