Understanding the Difference
Certificates of deposit (CDs) can be a good choice for personal savings. Like other deposits in FDIC-member banks, CDs are insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum amount allowed by law, meaning your money is as safe as it can be.
When you open a CD, you agree that you will not withdraw the funds until the maturity date, which varies from a few months to several years after you open the account, depending on the term you choose. You can close a CD before the term ends, but you typically will pay an early withdrawal penalty for doing so. CD rates will vary by financial institution, but are usually higher than the rate you’ll receive when you place the same amount into a savings account for the same amount of time. CDs come with a variety of terms, but usually offer a fixed rate for a fixed term.
Money market accounts
Money market accounts also can be a good place for your funds, especially if you need a little more flexibility of access than you get with a CD. You usually have check and debit card access to make withdrawals within federal transaction limits. Money market rates are variable, as opposed to the normally fixed rate on a CD, meaning rates can move up or down with economic conditions. And, as with a CD, the money in an MMA is FDIC-insured when you bank with an FDIC-member bank.
The Ally Bank difference
Ally Bank makes saving money as easy, convenient and rewarding as it can be. You can open any account with any amount and we don’t charge monthly maintenance fees. We offer interest rates that are among the most competitive in the country and we compound interest daily for maximum earnings. Take a look at all the great features of our High Yield CDs, No Penalty CDs and Raise Your Rate CDs as well as our Money Market Account. Learn more at Allybank.com or call live, 24/7 customer support at 877-247-ALLY (2559) today.