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
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
However, unlike Savings Accounts, CD accounts often cannot have funds
released or moved until the life of the certificate has expired - in
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.