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Money market accounts vs. CDs: Which to choose?

Whether you're saving for your retirement or looking for a safe yet liquid place to keep your money between major investments, money market accounts and certificates of deposit--often called CDs--may both be good choices--but they have key differences.

If you are comparing money market accounts vs. CDs, here are the main differences and why you'd choose one over the other.

Money market accounts offer high interest and security

Available from nearly any bank, money market accounts provide the security and liquidity of traditional savings accounts but usually at a higher average rate. In exchange, money market accounts typically have certain requirements, such as a minimum deposit amount and limits on withdrawals.

Money market accounts are very secure: Like a savings account, they are guaranteed by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per institution.

CDs: safe but locked up

Certificates of deposit are also protected by the FDIC but otherwise differ significantly from money market accounts.

While it's possible to withdraw money from a money market account with no penalty, CDs are locked in for a fixed term--which could be as little as 1 to 6 months or as long as 7 years or more--with penalties if you withdraw before the term is up. Once you fund a CD, you can't pull out your money without a steep penalty.

In money market accounts vs. CDs decision, money market wins for many situations

So which option wins in the contest between money markets vs. CDs? That depends on your circumstances, your need for liquidity and the interest rates offered on each. In general, however, money market accounts are a wiser choice if you aren't absolutely sure that you can leave your cash locked away for a certain amount of time.

What's more, even though you might be tempted to choose a CD for a slightly higher rate when deciding between money market accounts vs. CDs, you may actually be in a better position if you think interest rates will rise in the future.

That's because interest rates on money market accounts fluctuate with the market, while CD rates are locked in when you fund a CD. If interest rates rise, the money market rate will also rise but the CD rate will not (unless you have a special CD with floating terms).

In the comparison between money markets vs. CDs, money market accounts win out for most scenarios. With comparable average interest rates and easier access to your cash, money market accounts come out ahead and are a smart choice for experienced and casual investors alike.

Money Market Rates

O Bee Credit Union
Minimum to earn APY $0
7.52% APY
Rates as of 2019-10-18
Advertiser Comments
Savings Account - Tier $0 - $500 - Must be a member - Must meet See morerequirements to obtain this APY

Type: Savings

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Ultima Bank Minnesota
Minimum to earn APY $0
2.52% APY
Rates as of 2019-10-18
Advertiser Comments
SMART Savings Account - for young adults 18 years or younger - Withdrawals prior to See more18th birthday may result in a penalty

Type: Savings

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Northern Bank Direct
Minimum to earn APY $0
2.50% APY
Rates as of 2019-10-18
Advertiser Comments
Online Money Market - APY for balances Less than $250,000 - No monthly service charges

Type: MMA

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All America Bank
Minimum to earn APY $0
2.40% APY
Rates as of 2019-10-16
Advertiser Comments
Mega Money Market - Online account

Type: MMA

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Popular Direct
Minimum to earn APY $0
2.30% APY
Rates as of 2019-10-18
Advertiser Comments
Popular Direct Plus Savings - $4 monthly fee waived with $500 minimum daily balance

Type: Savings

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SFGI Direct
Minimum to earn APY $1
2.27% APY
Rates as of 2019-10-18
Advertiser Comments
SFGI Direct Savings - Online account

Type: Savings

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Vio Bank
Minimum to earn APY $100
2.27% APY
Rates as of 2019-10-18
Advertiser Comments
High Yield Online Savings Account - No monthly service fee - Interest is compounded daily See more- 6 free withdrawals per monthly statement cycle

Type: Savings

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MemoryBank
Minimum to earn APY $0
2.25% APY
Rates as of 2019-10-18
Advertiser Comments
Online Money Market - APY for balances $0.01 - $1,000,000

Type: MMA

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UFB Direct
Minimum to earn APY $25,000
2.15% APY
Rates as of 2019-10-18
Advertiser Comments
UFB Premium Money Market - Tier $25,000 - $49,999.99 - $10 monthly maintenance fee waived See morewith a minimum $5,000 average daily collected balance - Apply online

Type: MMA

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WebBank
Minimum to earn APY $1,000
2.10% APY
Rates as of 2019-10-18
Advertiser Comments
Savings - APY for balances $1,000 and above - No monthly fee - Interest compounds See moredaily

Type: Savings

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MySavingsDirect
Minimum to earn APY $0
2.10% APY
Rates as of 2019-10-18
Advertiser Comments
MySavings Account - APY for all balances - No fees - No minimum balance

Type: Savings

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Western State Bank
Minimum to earn APY $0
2.10% APY
Rates as of 2019-10-18
Advertiser Comments
High Yield Money Market - APY for balances up to $3,000,000 - Online account - See moreNo monthly fees

Type: MMA

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CIBC Bank USA
Minimum to earn APY $0
2.05% APY
Rates as of 2019-10-18
Advertiser Comments
CIBC Agility Savings - APY for balances up to $250,000

Type: Savings

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Northpointe Bank
Minimum to earn APY $25,000
2.05% APY
Rates as of 2019-10-18
Advertiser Comments
Ultimate Savings - Tier $25,000 - $1,000,000

Type: Savings

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First Internet Bank
Minimum to earn APY $0
2.02% APY
Rates as of 2019-10-18
Advertiser Comments
Money Market Savings - Rate earned on balances from $0

Type: MMA

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Salem Five Direct
Minimum to earn APY $0
2.01% APY
Rates as of 2019-10-18
Advertiser Comments
eOne Savings - APY on balances of 0.01- $1,000,000 - Companion account to eOne Checking, See moreno minimum balance, no monthly fees, free ATM card - Online applicants only, who do not have existing deposit accounts with Salem Five

Type: Savings

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Sallie Mae Bank
Minimum to earn APY $0
2.00% APY
Rates as of 2019-10-18
Advertiser Comments
Money Market Account - APY for all balances - Apply online

Type: MMA

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Cadence Bank, N.A.
Minimum to earn APY $0
2.00% APY
Rates as of 2019-10-16
Advertiser Comments
Propel Savings - Tier $0 - $25,000 - Requires recurring auto-deposit from Cadence checking of See moreat least $25 in aggregate monthly

Type: Savings

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Citizens Access
Minimum to earn APY $5,000
2.00% APY
Rates as of 2019-10-18
Advertiser Comments
Online Savings - Tier $5,000 and above - No monthly service fees

Type: Savings

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Northpointe Bank
Minimum to earn APY $25,000
2.00% APY
Rates as of 2019-10-18
Advertiser Comments
Ultimate Money Market - Tier $25,000 - $1,000,000 - This rate is guaranteed for at See moreleast 24 months from date of opening account

Type: MMA

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Radius Bank
Minimum to earn APY $25,000
2.00% APY
Rates as of 2019-10-18
Advertiser Comments
Radius High-Yield Savings - APY for balances $25,000 and above

Type: Savings

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Live Oak Bank
Minimum to earn APY $0
2.00% APY
Rates as of 2019-10-18
Advertiser Comments
Personal Savings - APY for all balances - No monthly service fees

Type: Savings

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Beal Bank, USA
Minimum to earn APY $25,000
1.91% APY
Rates as of 2019-10-16
Advertiser Comments
Money Market - $25,000 or more - Beal Bank USA products are not currently available See moreto potential depositors in Texas and Ohio, however, Beal Bank products are - Rate collected within: 94104 (CA)

Type: MMA

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FNBO Direct
Minimum to earn APY $0
1.90% APY
Rates as of 2019-10-18
Advertiser Comments
Online Savings - APY for all balances - No minimums, no monthly fees, manage account See moresecurely online

Type: Savings

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Marcus by Goldman Sachs
Minimum to earn APY $1
1.90% APY
Rates as of 2019-10-18
Advertiser Comments
Online Savings - No transaction fees - No minimum deposit to open - FDIC insurance See moreup to the maximum allowed by law

Type: Savings

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Sallie Mae Bank
Minimum to earn APY $0
1.90% APY
Rates as of 2019-10-18
Advertiser Comments
High-Yield Savings - No minimum balance and no monthly service fees - Nationwide - Apply See moreonline

Type: Savings

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Barclays
Minimum to earn APY $0
1.90% APY
Rates as of 2019-10-16
Advertiser Comments
Online Savings - APY for all balances

Type: Savings

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Synchrony Bank
Minimum to earn APY $25,000
1.90% APY
Rates as of 2019-10-18
Advertiser Comments
High Yield Savings - APY for balances $25,000 and above

Type: Savings

Learn More
Synchrony Bank
Minimum to earn APY $5,000
1.90% APY
Rates as of 2019-10-18
Advertiser Comments
High Yield Savings - APY for balances between $5,000- $24,999

Type: Savings

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Synchrony Bank
Minimum to earn APY $0
1.90% APY
Rates as of 2019-10-18
Advertiser Comments
High Yield Savings - APY for balances Up To $4,999

Type: Savings

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Capital One
Minimum to earn APY $0
1.90% APY
Rates as of 2019-10-16
Advertiser Comments
360 Performance Savings Account - APY for all balances - No fees - No minimum See morebalance - Online account

Type: Savings

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Discover Bank
Minimum to earn APY $0
1.85% APY
Rates as of 2019-10-18
Advertiser Comments
Online Savings Account - No monthly fee and no minimum required balance

Type: Savings

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ableBanking
Minimum to earn APY $0
1.85% APY
Rates as of 2019-10-16
Advertiser Comments
Money Market Savings - APY for all balances - Up to 6 withdrawals are permitted See moreper month - apply online - ableBanking is a division of Northeast Bank

Type: MMA

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Mutual of Omaha Bank
Minimum to earn APY $1,000
1.85% APY
Rates as of 2019-10-18
Advertiser Comments
Online Money Market - Rate/APY for balances from $1,000 - $1,000,000

Type: MMA

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CIT Bank
Minimum to earn APY $100
1.85% APY
Rates as of 2019-10-18
Advertiser Comments
CIT Bank Money Market - APY for balances $100 and above

Type: MMA

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Ally Bank
Minimum to earn APY $0
1.80% APY
Rates as of 2019-10-16
Advertiser Comments
Online Savings - APY for all balances - Free online transactions, no monthly fees, no See moreminimums - Apply online - Rate collected within: CA

Type: Savings

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Dollar Savings Direct
Minimum to earn APY $0
1.80% APY
Rates as of 2019-10-18
Advertiser Comments
Dollar Savings - No need to change your checking account, your Dollar Savings Account will See morebe linked to your current checking account

Type: Savings

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SmartyPig
Minimum to earn APY $0
1.80% APY
Rates as of 2019-10-18
Advertiser Comments
SmartyPig Savings - Tier $0.01 - $2,500

Type: Savings

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iGOBanking
Minimum to earn APY $0
1.80% APY
Rates as of 2019-10-18
Advertiser Comments
iGO Online Savings - APY for all balances

Type: Savings

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SmartyPig
Minimum to earn APY $10,000
1.80% APY
Rates as of 2019-10-18
Advertiser Comments
SmartyPig Savings - Tier $10,000.01 - $50,000

Type: Savings

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SmartyPig
Minimum to earn APY $2,500
1.80% APY
Rates as of 2019-10-18
Advertiser Comments
SmartyPig Savings - Tier $2500.01 - $10,000

Type: Savings

Learn More
BankPurely
Minimum to earn APY $0
1.80% APY
Rates as of 2019-10-16
Advertiser Comments
SavingPurely - APY for all balances - Zero monthly fees - One tree will be See moreplanted for every SavingPurely account opened

Type: Savings

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Alliant Credit Union
Minimum to earn APY $100
1.80% APY
Rates as of 2019-10-16
Advertiser Comments
Alliant Savings - APY for balances of $100 or more - Must be an Alliant See moreCU member

Type: Savings

Learn More
SmartyPig
Minimum to earn APY $50,000
1.80% APY
Rates as of 2019-10-18
Advertiser Comments
SmartyPig Savings - APY for balances $50,000.01 and above

Type: Savings

Learn More
Beal Bank
Minimum to earn APY $25,000
1.76% APY
Rates as of 2019-10-16
Advertiser Comments
Money Market - Tier $25,000 and up - Rate collectted within 94104 (N CA) Beal See moreBank, SSB

Type: MMA

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Discover Bank
Minimum to earn APY $100,000
1.76% APY
Rates as of 2019-10-18
Advertiser Comments
Money Market - Tier $100,000 and over - $10 monthly fee if balance falls below See more$2,500 after third statement cycle

Type: MMA

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Colorado Federal Savings Bank
Minimum to earn APY $1
1.75% APY
Rates as of 2019-10-18
Advertiser Comments
High Yield Savings - You may access your funds only through ACH (ACH fee applies)

Type: Savings

Learn More
Bank of Blue Valley
Minimum to earn APY $0
1.75% APY
Rates as of 2019-10-16
Advertiser Comments
Platinum Savings - APY for balances up to $50,000 - $7,500 average daily balance to See moreavoid $12 monthly maintenance fee - Platinum Checking or Signature Series Checking is required to open a Platinum Savings account

Type: Savings

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Quorum Federal Credit Union
Minimum to earn APY $0
1.75% APY
Rates as of 2019-10-18
Advertiser Comments
HighQ Savings - No monthly fee and no balance minimums

Type: Savings

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E*Trade Bank
Minimum to earn APY $0
1.75% APY
Rates as of 2019-10-18
Advertiser Comments
Premium Savings Account - APY for all balances - $10 monthly fee waived with an See moreaverage monthly balance of $1,000 in this account, or $5,000 in total E*TRADE Bank deposit balances

Type: Savings

Learn More