You’ve found a way to save some money, but now you have to decide where to put your money so it’s ready when you need it. That’s a good problem to have.

Three of the most popular short-term options offered are Savings Accounts, Certificate Accounts, and Money Market Accounts. All of these accounts are offered by financial institutions that are federally insured, making them the safest possible place to put your savings.

Let’s take a look at these three types of accounts and then see which one is right for you!

money market image

Savings Account:

A savings account is a place where you can store cash securely while you earn interest on your money. You can use your savings account to create some distance between your everyday spending money, usually kept in your checking, and cash that is meant for a later date, like an emergency fund or vacation savings.  Unlike investment accounts, they are federally insured, which means up to $250,000 of the money in your account would be covered should anything happen to the Credit Union.

Savings accounts usually pay out earned interest each month or quarter but the downfall is that it is usually a smaller amount, compared to the other interest bearing accounts offered. Generally speaking, after a checking account, a savings account offers more accessibility to your funds rather than a CD or Money Market account. While there are some restrictions, most are easy to maintain.


Certificate Accounts (CD’s):

A Certificate Account (CD) is a non-risky account that pays the largest amount in interest.  It is a type of savings account that requires you to lock away your money for a certain period of time with no access to it until the term you chose has been reached.  Like stated previously, CD’s have minimal to no risk. There are no monthly fees charged and the rate is always fixed, meaning the rate will not change until the CD is closed and reopened with the new offered rates.

CD’s usually have a minimum balance deposit amount, mostly because the rates are usually determined based on the amount you have deposited and how long you promise to deposit it for.  CD terms can vary from a few days to decades.

CD accounts are great for members who have a lot of money they don’t plan to use and want to grow this money quickly!  You can open up one large CD with all the funds or you can deposit it into different accounts that are locked away for different time frames to keep an eye on rates. The only large downfall to having a CD is that you have no access to these funds until the CD matures.  If you would want to close it early, there are usually hefty penalties involved that you must pay before your CD is liquid. So it would be up to you to determine if it’s worth closing early or not.


Money Market Account:

Lastly, another great option is a Money Market Account.  This account pays a higher interest rate for the funds without fully investing the funds. Money market accounts generally have a minimum balance requirement and usually do NOT have a maximum balance limit.  They are normally limited to the amount of withdrawals per month – most financial institutions allow 6 free per month before they charge you a small fee.

A money market account is a good option for you if you are looking to deposit a large sum of money and want to earn some good interest and still have access to spending it if you choose.  Most money market accounts have debit card access and checks you can write on the account.  You also will have access to transfer money online!

If there is a time in your life where you need to deposit a large chunk of money and there is a slight chance you would ever need to use it to cover an emergency, then it might be best for you to check out your Credit Union’s money market accounts that will pay better and allow you to use your funds.

We suggest you spend time researching local Credit Unions to see what accounts they offer and what the requirements are.  Always best to keep any and all fees in mind.  Some fees are unavoidable but many you can avoid just by your spending and saving behavior.  Check out all the rates and requirements and be sure you’re getting the best rate in the best account possible.   One thing to note: the best rate doesn’t always mean the highest rate. You have to keep all factors in mind.  Look at monthly fees, transaction fees, early closeout fees, etc.  If the rate doesn’t make up for any possible fees then you might want to keep looking.  If at any point you are stuck or need questions answered, you are always welcome to stop into your local Credit Union and talk with a rep.

Our hope is to provide good thinking points for you when you inherit your millions so you will be confident where to put your funds and know which account is best for you.  🙂

Happy Savings!!

Lindsey G.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s