Money market accounts vs. CDs

The key differences and how they can affect your ability to save

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Money market accounts and certificates of deposit (CDs) can offer competitive interest rates and features, but they’re completely different products. Your choice between the two may affect how you access your money, the interest rate you’ll earn and more.

What’s the difference between money markets and CDs?

A few key differences to be aware of before choosing where to put your savings:

Money marketCertificate of deposit
AboutInterest-bearing deposit account that provides flexible access to your money with check and debit capabilitiesLocks in a fixed interest rate for a fixed amount of time and charges a penalty for withdrawing your money early
InterestUp to 2.45%Up to 3.1%
Check writingUsuallyNo
ATM accessUsuallyNo
Eligible for FDIC insuranceYesYes
Minimum depositUp to $25,000Up to $10,000
Six-transaction limitYesNo
Withdrawal penaltyNo — Unless you withdraw more than six times in a monthYes

Why do CDs pay more interest than other accounts?

When you deposit money into a CD, your money is locked away until it reaches maturity. And since you’re agreeing to keep your money in the bank for a fixed period of time, the bank is willing to pay you a higher interest rate.

Pros and cons of money market accounts vs. CDs

Money market accounts

  • Flexibility. Money market accounts typically come with check-writing abilities and a debit card, giving you access to your money if needed.
  • Solid APY. These accounts can pay APYs that are similar to or higher than savings accounts.
  • Account features. Some accounts come with features like bill pay, direct deposit and budgeting tools.
  • Possible deposit requirements. These accounts can have much higher deposit requirements than CDs.
  • Fees. Monthly maintenance fees and other service charges are common with these types of accounts.


  • Highest APY. Certificates of deposit can pay some of the highest APYs of all consumer deposit accounts.
  • No fees. Unlike most deposit accounts, certificates of deposit don’t have monthly fees or other service charges.
  • Encourages saving. With incentives to keep your money in the account and penalties to withdraw, you’re encouraged to keep saving.
  • No account features. Unlike most deposit accounts, CDs don’t come with features like bill pay or direct deposit.
  • Possible deposit requirements. Most require a minimum deposit of at least $500 to $1,000 to open.
  • Limited access. You won’t be able to access the money in your account unless you’re willing to pay a penalty.

Compare top-rated accounts

Name Product Interest rate (APY) Fee Minimum deposit to open
BBVA Money Market
$15 per month
(can be waived)
Earn one of the highest annual percentage yields (APYs) if you live in one of 42 eligible states, and access your money by ATM, check or bill pay.
UFB Direct Premium Money Market Account
$10 per month
(can be waived)
Enjoy the security and earning potential of a savings account while maintaining the flexibility to write checks.
CIT Bank Money Market
A savings account with a higher-than-average rate and minimal fees.
CIT Bank Savings Builder High Yield Savings Account
A super-high interest rate if you're in the habit of saving at least $100 per month or have $25K in the bank.
Huntington Relationship Money Market
$25 per month
(can be waived)
This money market account includes an ATM card and a 24-hour overdraft grace period.

Compare up to 4 providers

Name Product 1-year APY 18-month APY 2-year APY 3-year APY 5-year APY
CIT Bank Term CDs
Radius Bank CDs
Discover CDs
Barclays Online CDs
Ally High Yield CDs
2.05% on CDs of $25,000+

2% on CDs of $5,000 to $24,999

1.9% on CDs of $0 to $4,999
2.1% on CDs of $25,000+

2.05% on CDs of $5,000 to $24,999

1.95% on CDs of $0 to $4,999

Compare up to 4 providers

How to compare money market accounts vs. CDs

When comparing your options, consider these factors that could affect how you save:

  • Interest rates. You’ll generally earn higher interest rates with CDs, but consider whether that extra interest is worth restricted access to your money.
  • Deposit requirements. Money market accounts generally have higher deposit requirements than CDs, though they can vary significantly.
  • Features. While CDs generally have higher interest rates, they won’t offer perks and benefits like money market accounts might.
  • Fees. CDs don’t typically have fees, whereas money market accounts could have service fees, overdraft charges, excess withdrawal fees and more.
  • Access. Money market accounts offer far more access than certificates of deposit.
  • Security. Both of these accounts are eligible for FDIC deposit insurance, but only if the issuing bank is covered.

Bottom line

Certificates of deposit often offer higher interest rates than money market accounts, but restrict access to you money. Money market accounts, on the other hand, may offer more general flexibility. Compare both options to find out which is right for you.

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