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Money market account vs. CD: The differenceMoney market accounts (MMAs) and certificates of deposit (CDs) are types of federally insured savings accounts that earn interest. But their rates and ease of access differ.
When to choose a money market account over a CD
LendingClub CD LendingClub CD When to choose a CD over a money market account
When to choose a savings account instead
Frequently asked questions How do rates differ for CDs and money market accounts? CD rates are typically higher than money market account rates. Banks have an incentive to give you better rates for CDs because you promise to give up access to your money until the end of the CD term. What’s the difference between a CD and a mutual fund? CDs are time-sensitive savings accounts, while mutual funds are investment vehicles in which money gets invested in stocks, bonds or other assets. Learn more about mutual funds. Which is safer: CDs or MMAs? Both CDs and MMAs are federally insured savings accounts, so they’re equally safe. Up to $250,000 gets insured in your name across your individually owned accounts at one bank or credit union. (Learn more about federal deposit insurance.) Compare types of bank accountsYour cash can go into many different bank accounts, and it’s helpful to know the pros and cons of account types. Check out these articles to help you choose the right account. For comparing two accounts: For deciding on where to bank: Which is better money market fund or money market account?Money market funds are mutual funds that pool money from multiple investors into different investment vehicles. Savings accounts and money market accounts are bank products. While money market funds have no FDIC guarantee, they are low-risk. Money market funds tend to offer higher returns than money market accounts.
What type of account is money market fund?A money market fund is an investment that is sponsored by an investment fund company. Therefore, it carries no guarantee of principal. A money market account is a type of interest-earning savings account. Money market accounts are offered by financial institutions.
What is money market account?A money market account is an interest-bearing account that you can open at banks and credit unions. They are very similar to savings accounts, but they offer some checking account features as well. Money market accounts are different from money market mutual funds.
How long should you keep money in a money market fund?Money market funds are usually considered to be sake investments, but it's important to remember that these investments are intended for the the short term. With maturities of 13 months or less, the funds stay liquid and allow you better access to your money than longer-term investments.
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