Ready to start saving? Fantastic! But you’ve probably realized that there are several types of deposit accounts out there—and you might not be sure which to pick. What is the difference between money market and savings accounts, anyway? And how does a CD savings account (a certificate of deposit) work?
Well, the biggest differences between the three come down to flexibility and yield. Savings accounts generally have the lowest APY (annual percentage yield), but they’re cheap and easy to open and maintain. Money market accounts have a moderate APY, and they offer plenty of ways to access your money. And a certificate of deposit usually has the highest APY, but your money is locked up for a long term length.
All of which sounds great—but you probably still have questions. So below, we’ll explain the ins and outs of these three types of deposit accounts and help you decide which is right for your business.