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HomeTop Global NewsCDs vs. Money Market Accounts vs. High-Yield Savings Accounts

CDs vs. Money Market Accounts vs. High-Yield Savings Accounts

Like folding your laundry or eating your vegetables, saving your money is a boring but important part of being a responsible adult. But you can spice things up a bit by putting your savings in a deposit account that earns you money for doing the right thing.

Three popular places to save money are in a CD account, money market account and a high-yield savings account. Each account comes with a few key differences and the returns you receive can vary. Here’s a breakdown of what you need to know about each account and which account can help you earn the highest APY.

What we’ll cover

What are the differences between a money market account, a CD and a high-yield savings account?

LendingClub High-Yield Savings

LendingClub Bank, N.A., Member FDIC

  • Annual Percentage Yield (APY)

  • Minimum balance

    No minimum balance requirement after $100.00 to open the account

  • Monthly fee

  • Maximum transactions

  • Excessive transactions fee

  • Overdraft fees

  • Offer checking account?

  • Offer ATM card?

Western Alliance Bank Savings Account

Western Alliance Bank is a Member FDIC.

  • Annual Percentage Yield (APY)

  • Minimum balance

  • Monthly fee

  • Maximum transactions

    Up to 6 transactions each month

  • Excessive transactions fee

    The bank may charge fees for non-sufficient funds

  • Overdraft fee

  • Offer checking account?

  • Offer ATM card?

While you can’t lock in the APY of a savings account, you can deposit additional money and withdraw your money at any time for no penalty (though, some accounts may have monthly withdrawal limits and you may incur a fee for excessive transactions).

CD accounts

Best for when you want to lock in an APY and don’t need your money quickly

Short for certificate of deposit, CDs tend to offer higher APY’s compared to high-yield savings accounts. But there’s a catch: Your money must stay locked up in the account for a specified period of time in order to earn the APY. Withdrawing your cash early may incur a fee. For this reason, a CD account isn’t the best type of account to house your emergency fund, since you usually can’t withdraw your money at will without paying a price.

While the APY a financial institution offers on a CD account will change with the broader interest rate environment, the moment you make a deposit into a CD you lock in the current rate (unless it’s a variable-rate CD). This makes it a smart move to deposit money in a CD account when interest rates are high, but you suspect they may begin to fall.

This makes it a bit easier to control how much you earn on your money if you were to make a deposit during a high APY climate. Another thing to keep in mind is that once your money is deposited, you cannot go back and make additional deposits, unlike with high-yield savings accounts.

Money market accounts

Best for when you want the features of a checking account with the high APY of a savings account

This account type shares many features with the high-yield savings account — deposit cash any time and earn a high APY on your balance — but a money market account also provides easy access to your money similar to a checking account.

With a money market account, you can usually write checks, use a debit card and access a network of ATMs. CDs and high-yield savings accounts rarely boast these features, which is why money market accounts are the best choice for someone who wants to withdraw their money with the least amount of fuss.

Money market account customers earn a higher APY than they would with a traditional savings account, but earnings from money market accounts tend to be on par with that of high-yield savings accounts.

Compare offers to find the best savings account

Which account lets you earn the highest APY?

Marcus by Goldman Sachs® CDs

Marcus by Goldman Sachs® is a brand of Goldman Sachs Bank USA, a Member FDIC.

  • Annual Percentage Yield (APY)

  • Terms

  • Minimum balance

  • Monthly fee

  • Early withdrawal penalty fee

    You are not permitted to withdraw a portion of your principal at any time prior to maturity. If you withdraw the entire principal amount from your CD account prior to maturity, you will be charged an early withdrawal penalty based on the term of your CD account and the principal, except in the case of a No-Penalty CD. Less than 1 year = 90 days interest on the original principal balance at the interest rate in effect for the CD; 1 year to 5 years = 180 days interest on the original principal balance at the interest rate in effect for the CD; more than 5 years = 270 days interest on the original principal balance at the interest rate in effect for the CD.

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Bottom line

CDs, money market accounts and high-yield savings accounts are all great tools for growing your savings without having to invest your money and subject it to the volatility of the stock market. But if you want to earn as much interest on your balance as possible, CDs provide the ability to do so as long as you choose a longer maturity timeline and can actually keep your money locked up for the entire term.

Why trust CNBC Select?

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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