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What are Savings, CDs, and Money Market Accounts for?

Savings Accounts are financial accounts, established through your bank (also known as a Credit Union), in which are set forth with flexible plans that allow you to accrue interest on the money you deposit over a set period of time, or more flexible plans; which offer a lower interest rate but more flexibility and comparable protection - as your funds are still insured up to $250,000.00 via the FDIC - the Federal Deposit Insurance Corporation.

Savings Accounts, in comparison to other types, are unique in that they specifically allot the flexibility to collect interest on not only an annual, but also monthly, weekly, or even daily basis. Although Savings Accounts can be 'tapped into' more frequently than others such as CD's or Money Market accounts, it should be understood that via federal law there is a maximum amount of monthly withdraws in some instances - or others such as via the internet, including transactions between your Savings and Checking Accounts.

CD Accounts, also known as Certificate of Deposit Accounts are ones in which are established at a typically much more advantageous and profitable interest rate - both profitably serving the bank and you, the consumer.

However, unlike Savings Accounts, CD accounts often cannot have funds released or moved until the life of the certificate has expired - in many instances as much as 1-7 years. CD accounts are more desirable and profitable for those whom have enough financial stability to put away money for a considerably extensive period of time, as withdrawing early could lead to unwanted financial penalties.

Money Market accounts, last but not least, are very unique in that although they start at a fixed-rate, can follow an agreed upon range or change throughout the lifetime of the account and agreement--as it has the potential to fluctuate both for and against your interest in some instances, per the economy.

While Money Market Accounts can easily be one of the most profitable types of accounts, it depends on just that, the value of the dollar and the money market. Understandably, Money Market Accounts are most practical for those with a substantial income or business, as there are often very high 'minimum balances', easily in the range of at least $25,000-$50,000 per many banking institutions. - (C) 2016 Lookup United Kingdom - Articles on this site do not consitute legal or financial advice. Contact your licensed financial advisor for that. Terms/Privacy Contact Us