Long-term savings goals tend to be well suited to certificates of deposit (CDs), while an online savings or money market account tends to be better for short-term savings goals. Here's why:
CDs have a set maturity date, allowing your balance to grow untouched until you need the money.
In exchange for leaving your money deposited in the bank for anywhere from a few months to several years, depending on your long-term savings goal, you will usually earn a better interest rate in a CD than what you could earn in a savings account. If you withdraw your money before the CD matures, however, you will likely have to pay an early withdrawal penalty. One option for avoiding this is the Ally Bank No Penalty CD, which allows you to withdraw all your money, including interest earned, without penalty, any time after the first six days following the date you fund your CD. The attractive interest rate, combined with the built-in savings discipline, can make CDs a smart choice for your long-term savings goals. But what about short-term savings goals?
Savings and money market accounts offer greater flexibility of access.
At Ally Bank, both our Online Savings Account and our Money Market Account earn a competitive interest rate, based on the rates published on Bankrate.com. However, you can continue to deposit money in these accounts over time as well as make withdrawals (within federal transaction limits) as you reach each short-term savings goal. The primary difference between the Online Savings Account and the Money Market Account is that the Money Market Account gives you check-writing privileges and debit card access.
Ally Bank is committed to making saving as easy, secure and rewarding as it can be. Learn more at Allybank.com or call live, 24/7 customer support at 877-247-ALLY (2559) today.