Banking Practice Showdown 2025 – Vault into Your Future Success!

Jumbo certificates of deposit (CDs) are indeed characterized by several key features that are accurately reflected in the correct answer.

First, jumbo CDs typically require a minimum deposit that is substantially higher than traditional CDs, often set at $100,000, but this can vary between institutions. Though the phrasing in the question suggests that they are characterized specifically by being "$1 million in size," this amount represents a common benchmark rather than a strict requirement. Jumbo CDs are generally seen as larger-sized deposits, which is an important distinguishing feature.

Next, jumbo CDs are negotiable, meaning they can be bought and sold in secondary markets. This is a critical factor for investors looking for liquidity, as traditional CDs usually have penalties for early withdrawal and are not negotiable. The ability to negotiate a jumbo CD provides flexibility and can enhance its attractiveness to investors.

Lastly, while the typical maturity for these instruments does not strictly require periods greater than 10 years, many jumbo CDs can have such long maturities, alongside options that are designed for varying terms.

Thus, the characteristics of having larger deposit amounts, being negotiable, and often featuring extended maturities collectively define jumbo CDs. Therefore, selecting all of these attributes reflects an understanding of the nature of jumbo CDs