If you're looking for places to put your savings, you've probably come across a variety of products that potentially could meet your needs. A certificate of deposit (CD), savings account, or money market account each has the ability to be a saver's best friend. But how do you know which one is best for you? And when is it smart to put your money in a CD vs. a money market or savings account?
Money market and savings accounts
Both money market and savings accounts have federal transaction limits, but a money market account typically gives you more flexible access to your funds. With an Ally Bank Money Market Account, for example, you earn a competitive variable rate, and you can open and fund your account with any amount. You get free standard checks and a debit card for convenient access to your money. With an Ally Bank Online Savings Account, you get a great rate, too. You can open and fund your account with any amount and there are no monthly maintenance fees, but you can't access your funds via ATM or personal check.
While money market and savings accounts typically earn a variable interest rate, a CD usually comes with an interest rate that does not vary over the term of the CD. CDs with longer terms usually have the highest annual percentage yields (APYs). So if earning a great APY is your only concern, a CD might make the most sense. With a CD, however, you almost always agree to keep your money deposited until maturity or pay an early withdrawal penalty. Ally Bank offers a range of CDs that can help you reach your savings goals. Our High Yield CD, Raise Your Rate CD, and No Penalty CD consistently come with among the most competitive rates in the country according to Bankrate.com.
Your savings goals
The bottom line is that choosing which type of account to help you save doesn't have to be an either/or choice. If you're saving for a longer-term goal, CDs may be a good option. And for your emergency fund or other shorter-term goals, a money market or savings account might work best.
At Ally Bank, we are committed to making saving as easy and rewarding as it can be. You can open and fund any account with any amount and your deposits are insured by the Federal Deposit Insurance Corporation (FDIC) to the maximum amount allowed by law. Take a look at what we have to offer and start saving today. Visit Allybank.com or call live, 24/7 customer support at 877-247-ALLY (2559).