Account Types
Comparing Account types :
most liquid account to least liquid account
checking → savings→ certificate of deposit
order from the highest to lowest interest rate
certificate of deposit → savings → checking
- Checking Account: Have high liquidity. Allows you to easily deposit and withdraw money using an ATM, debit card, or personal check. Having a checking account is a smart option if you make frequent transactions. Most of these accounts come with a debit card and checks.
- Savings Account: Lets you earn interest when you deposit money. Savings accounts are less liquid than a checking account. Access to your money is more limited and you may be charged special fees for accessing this account too frequently. But not touching your money is really the whole point of a savings account anyway - you want to put money in this account and keep it there so it can accumulate interest over time.
- Certificate of Deposit (CD): Certificates of Deposit generally offer a higher interest rate than savings accounts because the bank holds your deposit for a fixed period of time. Access to your money is more limited, and you may be charged a penalty for withdrawing your money before the time period is up, which makes this account type less liquid than a savings account.
- Money Market Account (MMA): HMoney market accounts - also called MMA's - offer a higher interest rate than a typical savings account. You can also write checks from an MMA, but there can be restrictions like a high ongoing minimum balance.
Comparing Account types :
most liquid account to least liquid account
checking → savings→ certificate of deposit
order from the highest to lowest interest rate
certificate of deposit → savings → checking