Which generates more interest?

Question

Having a savings account or having a Certification of Deposit (CD)?

Thanks!

Answer 1

There's wide spread of interest rates for both, depending on the term length of the CD, etc.

Check on http://www.bankrate.com for comparing rates from a wide variety of banks.

Answer 2

usually CD

saving should give u the least yield.

the reason you get high interest in CD because they disallow you to take ur money out in 6-12 monthes or more depends on the type u picked

Answer 3

I've seen the rate cards at some banks, and there is no advantage to having a certificate of deposit as opposed to the common "passbook" savings type.

Traditionally, however, banks pay a little more interest, or perhaps through compounding, for a CD. The idea is that it was to their advantage to have certain money "spoken for", as in largely certain to be there for a long period of time. This was commonly for mortgage money, or some sets of loan projects where the principle of the loan wasn't coming back anytime soon. For the promise of parking your cash, they would therefore pay you a slightly better deal.

Additionally, bigger amounts got still better interest rates (or compounding features), so if you parked, say, $100,000, this "jumbo CD" was going to be paid the interest paying equivalent of the prime rate, their best deal.

So, if you don't have $100k or several tens of thousands, you might find they aren't a whole lot interested. If they aren't, then don't bother.

The key to the story, therefore, is shop around (make sure you stay with something that is covered by the FDIC).

Answer 4

Depends on the current rate of each. Some savings is higher then a CD depending on the amount you invest and what you agree to as far as withdraws. Same goes for CDs.

Answer 5

CD.