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By Ken McCormick
Vice President, Relationship Management

What’s the Difference Between Savings Accounts, CDs and Money Market Accounts?

Mar 13, 2019

  • Money Market Account
  • Certificates of Deposit
  • Savings Accounts
  • Banking

You’re beginning to see some extra money after all the bills are paid, and now you need a place to keep it. What are the best savings plan options? A lot depends on your individual situation, but the three most common account types for saving money are savings accounts, certificates of deposit, and money market accounts. Here’s how each breaks down:

Savings Accounts  – A savings account is a money management tool allowing you to store your money safely and securely while earning interest over time. You can have limited access to the account for withdrawals and transfers.


  • Most banks do not require a minimum balance and can open with a low amount
  • Low fees or no fees charged
  • Insured up to $250,000 by the FDIC
  • Some banks allow automatic bill payments from savings accounts
  • Can access your savings at an ATM
  • Can transfer funds from checking to savings electronically


  • The lowest interest rates offered of the three types
  • The number of transfers or withdrawals per month is limited
  • Interest is often compounded monthly or annually instead of daily

Certificates of Deposit  – Much like a savings account, a certificate of deposit, or CD, is when your bank holds your savings over a fixed term at higher interest rates. The main difference is you will be penalized for withdrawing money before the agreed term is up. Typically, the longer the term, the higher the rate.


  • Higher interest rates than traditional savings accounts
  • Insured up to $250,000 by the FDIC
  • Interest rate will not change over the course of the term
  • A wide diversity of CD types to meet individual needs


  • Cannot access through ATM or electronic transfer
  • Penalties for early withdrawals

Money Market Accounts  – A money market account is an account that offers higher interest rates than a traditional savings account and allows easy access to funds much like a checking account. Larger minimum deposits and balances are required, however.


  • Higher interest rates than traditional savings accounts
  • Can write checks and make ATM withdrawals from the account
  • Insured up to $250,000 by the FDIC


  • Requires a higher initial deposit and ongoing balance or will incur fees
  • Lower interest than CDs
  • The number of transfers or withdrawals per month is limited

Depending on how much saving you have, and how fluid you can be with those funds, one of these plans will likely fulfill your savings goals. For more help to find out which savings plan is right for you, contact the experts at NASB at 800-677-6272, option 3 or click here find out more about savings options.