CDs or Money Market Account - Which Is Right for You?

If you're dissatisfied with the interest rate on your savings accounts and are looking for competitive interest rates, it's time to explore your options. Two financial products that can help you earn a higher interest rate on your money are CDs (also known as a certificate of deposit) and money market accounts. Here's what you should know about these alternatives so you can pick the right product for your financial needs.


CD is a financial product that typically requires you to invest a lump sum of money for a committed period of time. You reserve a specified interest rate (some more competitive than others) that doesn't change throughout the duration of the CD term. If you access your money before the CD matures, you'll pay a penalty that's equivalent to a specific amount of your earned interest.

How often the CD pays interest depends on the terms and conditions. Monthly, daily, and quarterly interest payments are all common; the sooner your CD pays interest, the higher your overall return. Once the interest is added to your CD, you'll earn new interest on your old interest payments.

For example, assume that you invest $100,000 in a 36-month CD that has a 3 percent annual interest rate. Interest is compounded daily. Your total interest earned will be $9,417.02 after the three years. However, if the interest is compounded quarterly, your total interest earned during the CD's term is $9,380.69
CDs are ideal if you want to lock in a specific interest rate for a pre-determined period of time. They're a safe, stable investment, but they aren't the right fit if you'll need easy access to your money.

Money Market Accounts

A money market account is similar to a savings account, but there are a few key differences. Like a savings account, you're permitted a limited number of withdrawals. Some even come with a debit card or checkbook so it's easier to access your money.

You can also add money to your money market account at any time. It's even possible to obtain your CCCU routing number and account number to have money direct deposited into the account.
Money market accounts earn a higher interest rate than most savings and checking accounts; however, the interest rate is usually less than that of a CD. The interest rate isn't fixed, and it can fluctuate over time.
Consider opening a money market account if you want to earn a higher interest rate but need to have easy access to your money. Money market accounts are safe, low-risk investments.
Ready to explore CCCU's competitive interest rates on our CD or money market accounts? Contact us today!