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CHOOSING BETWEEN A MONEY MARKET ACCOUNTS,CERTIFICATE OF DEPOSITS(CDS)OR A SAVING ACCOUNT.

At times it's hard to determine the right saving option between a saving account, a CDS account and a Money market account. Let’s compare the accounts;
Savings Account
Savings accounts typically have a higher rate that most current or checking accounts. With a regular savings account, you commit to depositing money each month, without fail. In return, your money earns a higher interest rate than you’d get with a current account. It’s best suitable for savers who are starting out and wish for a disciplined way to save. It’s also advisable to go for it if you are not looking forward to investing a lump sum. The interest rate varies it might be either fixed interest rate or a variable rate.Check before opening whether the interest rate is fixed or variable. Failure to remit the monthly savings may see your interest rate reduced or Charges may accrue on premature withdrawal.
The account might only last for a fixed term. At the end of the term, you get your money plus the interest accrued.Automatic savings plans can be the perfect option for developing a saving culture for spendthrifts. It's Offered by many banks to help customers save.The customer issues a standing order to the bank, to automatically transfer a specific amount of money from your current salary account into your savings account monthly. Most individuals with automatic savings enjoy seeing savings grow monthly while earning interest. However, there is a limit on the number of withdrawals each year. Don’t go for this type of account if you are saving for emergency purposes. Read the rules carefully before choosing a regular savings account.It also likely that a regular savings account has a limit on the maximum allowable savings each
Money Market Accounts
It is a financial account that pays interest on the basis of current interest rates prevailing in the money markets.
These type of investments typically puts its money in low-risk areas such as treasury bills and commercial papers. They have very short maturities, hence a safe haven when there is extreme volatility. Money market accounts are high liquid compared to stocks and bonds. They tend to invest in securities that are of high demand.
Money market deposit accounts require a balance of $100 to $2,500 hence the interest is significantly higher compared to regular savings accounts. The money markets account don’t have a limit on h withdrawals.
Certificates of Deposit (CDs)
A certificate of deposit (CD) is a savings certificate allocated a specified maturity date, a type of promissory note issued by the bank with a fixed interest rate. It is a time deposit, similar to a savings accounts that is insured hence risk-free. CDs also exist as savings certificates allowing you to receive interest periodically. An investor purchases it from the bank directly. CDs in most cases pay the best interest rates compared to all these accounts.
CDs operate on the theory that individuals forfeit cash at hand or liquidity for a higher return in the long run. Long term CDs have higher interest rates compared to short-term CDs.
Since there is more risk involved with holding the investment for a longer period of time and since the individual foregoes liquidity he is compensated with a higher return for a longer period.
From the details given each account has its merits and shortcomings. Educate yourself and learn to know the appropriate way that suits you in investing and saving. Share this article on social media and enlighten your peers on the different ways of investing. I believe they will find it interesting and informative.
For more detailed information visit
https://www.nerdwallet.com/blog/banking/checking-account-savings-account-cd-money-market-account/
https://www.usbank.com/savings/money-market.html

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