What is the Difference between a CD, a Money Market Account and a Savings account? ?

Question

Please, I really need help on this one.

Can people please tell me Everything that is different....

Interest, when you get paid interest, risk factor, just everything please.

I am awarding best answer too by the way.

Answer 1

   a c.d. is you invest your money for a time.like one year.at the end of that year they add the intrest to the amount you invested.you can not touch that money during that year.with out a penalty.money market.you put your money in and collect less intrest than a c.d.but more than a savings act.except you must maintain a certain amount to collect the higer intrest.your money is available when ever you want it.a savings act.put what ever you want.any time you want.if the amount of money you have in a savings account is more than you are going to need any time soon.transfer it into the money market act.hope this helps you.a penny saved is a penny earned.

Answer 2

Well, let's see.  Most of this info you can get from brochures at your bank lobby, so give them the best answer.  Here's the general outline of what you need to know.

Savings accounts are simply accounts into which you may deposit any amount at any time.  You may also make withdrawals at any time, but there may be fees for more than a fixed number of withdrawals per month.  They usually pay the lowest rates, usually quarterly, and are low risk, especially if your bank is FDIC insured.

CD's or Certificates of Deposit, are fixed amount time deposits.  They are usually in denominations of $1,000 or more and require you to leave the funds on deposit for a fixed period of time, usually at least one year.  They pay a little more than regular savings accounts, but if you take the money out early you may lose some of your deposit.  That's what "Substantial penalty for early withdrawal" means.  interest is usually paid quarterly, and you may have the option of taking it or leaving it in the account.  may be FDIC insured.

Money market instruments pay interest rates based on prevailing interest rates, and so the rate may vary over the time you have foney invested in such funds.  The rates may be higher or lower than other savings; the old "risk-reward" tradeoff.  Little risk of loss, but a drop in interest rates may cause it to become a poor performer, especially if it is a time-deposit.  There are a variety of money market plans, including checking accounts.  Usually have a minimum deposit of around $5,000.

Your bank will have specific information on the plans they offer.  Check your bank,s website, too

Answer 3

You generally get paid in

3 months, 6 months, 9 months, a year.

Interest rates are generally CD > MM > Savings.

They are all types of savings accounts.

CD accounts today give you about 4% or less.

MM & Savings accounts give so little you won't want to care how much.

Risks are the same, they are all FDIC insured and considered very safe, stable.

CDs are popular because they give the most compared to other "savings" and are the safest compared to other "investments".

That's about all you need to know. My personal advice is, spend some time researching ways to save money by not spending, shopping smart, and a little investment. You'll see that you can easily make back your 4% (if not 10%) if you know your stuff.

Answer 4

A CD locks down your money for a set period

A MM normally pays less interest, but you can easily get into your money -- An MM is a "parking lot" for your money you do not need right off

A Saving Account is usually at a local bank and pays less interest -- Normally you shop around all over the country for the best paying MM (bankrate.com)