If you are concerned about finding a safe place to put your money, there are many choices to consider, and it ultimately depends on your financial needs and priorities. Deciding which type of account to open might seem overwhelming, but it doesn’t have to be once you understand the basics. Having an understanding of how these interest‐bearing deposit accounts work, and the differences between them, can help you make the best choice. Below are some options that will keep your money safe and give a boost to your savings by earning interest.

  1. Money Market Accounts

A money market account is an interest‐bearing savings account that pays a competitive rate and is liquid. They’re similar to a savings account, but they can offer some checking account features as well. This account is a great option for putting money away for a mid-term goal, such as a down payment in three to five years, since it requires a higher minimum balance and pays more interest. Plus, it’s liquid so if you need to tap into your funds earlier than planned, there are no penalties for early withdrawals. Under the Federal Reserve’s Regulation D, a money market account is considered a deposit account. However, the number of transactions, such as transfers and withdrawals, are limited to six per month. It’s important to keep in mind that some of your transactions, like withdrawing from an ATM or bank teller, do not count as one of the six transactions. There are exceptions to the limits, so check with your bank or credit union to find out their policy. Visit SDCCU to open your money market account with a competitive rate.

  • Higher interest: When compared to an interest-bearing checking account and average savings accounts, you’ll earn a higher rate of interest with a money market account.
  • Easily accessible funds: A money market account may come with check‐writing privileges, a debit card and the ability to make electronic transfers.


  • Limited withdrawals and transactions: Different from a checking account, money market accounts have restrictions. You can’t write unlimited checks or make unlimited electronic transfers.
  • Account minimum balances: You’re often required to keep a higher account minimum to earn interest or open an account than with a savings account or even a certificate of deposit (CD).
  • Monthly fees: If you don’t meet the minimum balance requirement, you may be charged a monthly fee.
  1. Savings Account:

A savings account is a basic type of account that allows you to deposit your money and typically earns interest. This is a safe option for short-term plans within a year or less, like a vacation or emergency fund. Most savings accounts are federally insured up to $250,000 per account owner and offer a very stable and safe place to put your money while earning interest.

  • It’s a safe place for your money: Savings accounts are backed by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA).
  • Lower fees and balance minimums: There are usually very low fees and balances required for a savings account.
  • Accessible at ATMs: You can usually access your savings account via ATMs, making it convenient to get money when you need it.


  • Low interest rates: Your interest on a savings account will probably be lower than what you’d earn on a certificate account.
  • Withdrawal limits: The number of withdrawals are typically limited to six transactions per month.
  1. Certificate Accounts or CDs (Certificate of Deposit):

A certificate account is the most restrictive of these savings accounts, but usually offers the highest interest returns. A great fit for long-term goals that are several years off, such as buying a house. A certificate account is ideal if you have a big sum of money that you can afford not to touch for a long time. Certificate accounts require a minimum deposit and their terms can range from a few months to five years. If you withdraw the money before the CD matures, expect to pay a penalty. Depending on the amount of money in the CD, you can earn a higher Annual Percentage Yield (APY) than you would with a savings account or money market account. For more information on certificate accounts and to find today’s rates, visit SDCCU’s certificate rates.

  • Interest rates: Not only is the interest rate on a certificate account often higher than other savings accounts, but it’s also fixed and doesn’t vary over the term, like you may see with money market and savings accounts.
  • Choice of term: You can choose how long you want to keep your savings locked up.


  • Not liquid and limited access: You can’t withdraw money from a certificate at an ATM or by writing checks. The money is not accessible unless you make an early withdrawal and penalties usually apply.
  • Penalties: Pulling out money before the CD term is up will incur a penalty. Some CDs allow you to withdraw some of the money without penalty, but they typically come with lower APYs and other restrictions.

Now that we’ve covered the most common types of savings accounts, you can feel confident in opening one that makes sense for you. According to the Consumer Financial Protection Bureau, having a savings cushion or a habit of saving can help you feel more in control of your finances and allow you to weather financial shocks more easily. Stop by your local SDCCU branch for assistance with choosing the right savings account for you or visit us at www.sdccu.com.
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