Multiple choice

Which of the following is not an advantage of bank deposits?

  1. Liquidity

  2. High perceived safety

  3. Low entry price

  4. High yield after tax
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Bank deposits are known for liquidity and safety, but they offer relatively low returns, especially after accounting for taxes on interest income. The yield from bank deposits is typically lower than inflation and many other investment options after tax, making high yield after tax their disadvantage rather than an advantage. The low entry price is actually a benefit.

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