Money Market Accounts vs. Certificates of Deposit: Which is Right for You?

When it comes to managing finances and saving for the future, how do you determine which account option is right for you? Thanks to the higher interest rates when compared with classic savings accounts, two of the most popular options are money market accounts and certificates of deposit.

It’s important to explore the differences in each account type and determine the right choice for you depending on your personal finances and goals. Together, let’s compare the benefits of a money market account and certificate of deposit to guide you through making the best decision.

Benefits of a Money Market Account

Are you looking for a savings solution that offers competitive rates and flexibility accessing your money? Featuring a low minimum deposit, a money market’s higher interest rate can help your funds grow more quickly. Whether you are searching for a deposit account for business or personal use, the benefits of a money market account can potentially help you reach your savings goals faster.

A favorite benefit of a money market account for many customers is the ability to access their funds with no penalties. Quaint Oak Bank customers who choose to open a money market have the privilege of no-penalty withdrawals as well as easy access to transfers with our online banking tool, BillPay.

man reviews his statement and the benefits of a certificate of deposit with quaint oak

Benefits of a Certificate of Deposit

The unique benefits of a certificate of deposit make it an attractive savings option, regardless of how the economy is performing. One of the standout benefits of a certificate of deposit is its fixed interest rate. Unlike a money market account with variable rates that are subject to change, CD accounts offer a set interest rate with a predetermined APY for a specific term.

A certificate of deposit is a smart choice for individuals interested in a consistent interest rate, and savings option with guaranteed returns. Whether your goals are for a long-term savings strategy for your business, or a steady solution that matches your personal needs, a certificate of deposit may be right for you.

Money Market and Certificate of Deposit Comparison

Use the chart below for a comparison highlighting the differences between each account type as well as money market and certificate of deposit advantages.

FeaturesMoney Market AccountsCertificates of Deposit
Minimum Deposit$25$500
Interest RatesVariable, Typically LowerFixed, Typically Higher
FlexibilityHighMore Limited
LiquidityFunds Readily AvailableFunds Accessible at End of Term
Penalty for WithdrawalNoneSubstantial
TermNo Fixed TermFixed Term (6 Months to 5 Years)
Rate of ReturnHigher than Classic Savings, Lower than a CDHigher than a Classic Savings or Money Market

Make a Money Market Account or CD Work for You

Both the benefits of a money market account and certificate of deposit can work for your needs, depending on your financial goals and savings strategy. Money markets provide competitive interest rates and flexibility, while CD accounts deliver stability and guaranteed returns. Connect with a member of our team to discuss your options and learn more.

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