Money Market vs. Certificate of Deposit (CD) – What’s the right savings tool for you?

Have you thought about your savings goals? Consider this, if you have money sitting in a checking account earning minimal or no interest, maybe it’s time to put that money to work in a savings instrument that will earn higher returns.

Money market and certificate of deposit (CD) accounts both offer stability and, when opened through a bank and dependent on the customer ownership structure with the account, are FDIC-insured up to $250,000. They are also a great way to safely stash cash, earn interest, and start or grow a savings path. How do you know whether a money market or CD savings product is right for you? It depends on your goals, short- and long-term liquidity needs, how you want to save and how you want to access your money.

Money Market Account

Money market accounts offer liquidity (access to your funds) that CDs often do not. Unlike CDs, the interest rate is not fixed for a set term and can fluctuate depending on market rates; however, rates are often better than what you might find with a traditional savings account, and you can commonly find short-term specials on introductory rates that are guaranteed.

Some financial institutions may limit the number of monthly withdrawals, but deposits can be made to the account at any time. Minimum balance requirements typically determine any monthly fees and the amount of interest the account earns.

Money market accounts are ideal for someone who is looking for a competitive yield for funds they still need access to.


Certificate of Deposit (CD)

CDs are lump-sum time deposit accounts that offer a guaranteed rate throughout the life of the deposit if funds remain in the account until maturity. This means you deposit a set amount for a designated period of time (usually one month to five years) and can generally expect to earn a higher interest rate than a money market account or a typical savings account.

While different types of CD products exist, your money will be tied up for the length of the agreed-upon term and the account often contains early withdrawal penalties. However, a guaranteed rate makes up for a CD’s lack of liquidity, and if you do not cash in your CD early, you will benefit from predictable returns.

A CD is a great savings tool for those looking for a more stable place to store money that you might not immediately need.


Overview of money market and CD account features


Money Market

  • Access to funds*
  • Rates are usually more comparable to saving account rates
  • Withdrawals and deposits are allowed
  • May include checks or debit cards
  • Number of monthly withdrawals may be limited**
  • Rates can fluctuate
  • Minimum deposit requirements to earn interest
  • Possible monthly fees
  • No maturity date

*Fees may apply **Some financial institutions may limit the number of monthly withdrawals


  • Money is “locked up” for a predetermined amount of time
  • Usually cannot add funds to the account
  • Usually a fixed rate
  • Usually offer higher rates than traditional savings accounts
  • Predictable returns*
  • Minimum deposit requirements to open
  • Penalty for withdrawal
  • Cash-out when the CD matures or can rollover into a new CD at the rates offered at the time of renewal

*If funds deposited remain in the account until maturity


Ready to start saving? Open an account online in just a few minutes:

When you are ready to open a new savings, money market, CD, or even a checking account, we offer the convenience of opening an account online.

Get started here.

Need more help? Our bankers can also assist you in determining the product that is right for you or suggest a savings strategy that can help you reach your goals. Find a branch near you.

Articles contained in our news section are not intended to provide recommendations or specific advice. Consult with a professional when making financial decisions. Once published, articles are not updated; information may be outdated.