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Savings accounts, money market accounts and CDs: What are they and which is right for you?

Savings accounts, money market accounts and certificates of deposit (CDs) are three popular savings options. Each type of account is offered by Commerce Bank and earns interest. Plus, the funds in each type of account are insured for up to $250,000 per depositor by the FDIC, making them a safe option. But depending on your goals and the initial amount you have to save, one option may be a better fit than another.

Here’s an overview to help you decide which savings type is best for you.

Savings Account Money Market Account Certificates of Deposit (CDs)

• Low minimum balance requirements
• Low or no fees
• Easy access to your funds through the bank or ATMs
• Easy to set up automatic transfers from your checking account


• Higher interest rate than savings accounts
• Ability to write checks, make electronic transfers and make ATM withdrawals


• Higher interest rate
• The security of a fixed return over a set amount of time, typically anywhere from three to 60 months

Be Aware Of:

• Lower interest rates
• Limited number of withdrawals per month

Be Aware Of:

• Lower interest rates
• Higher minimum deposit and minimum balance required to avoid monthly fees
• Limited number of checks and automated withdrawals per month.

Be Aware Of:

• Can’t access your money until the CD maturity date
• Penalties for early withdrawal

May be a good option if:

• You have a small balance and want to avoid paying fees
• You’re trying to build an emergency fund or save for a specific short-term goal, like an upcoming vacation
• A savings account can be an ideal first account for a child to help teach them how to save their money

May be a good choice if:

• You have enough money to meet minimum deposit requirements and you’re saving for a short-term goal
• If you have a savings account that’s accumulated a large amount of money, consider moving some or all of the funds to a money market account with a higher interest rate so your savings can grow faster

May be a good choice if:

• You have a lump sum of money that you know you won’t need for several months or more. For example, if you have funds saved for a down payment on a home that you don’t plan to buy for another year

The best savings option for your situation depends on the amount of money you have to save, your long and-short-term financial goals, and how soon you’ll need to access your money. To learn more about savings accounts, money market accounts and CDs, or for a one-on-one discussion about which type of savings account is right for you, visit your nearest branch or contact us today.

Also see

Credit 101: What credit is and how to get it

How to build a budget that actually works