Is it Better to Have a CD or a Money Market Account?
If you’re looking for a higher return on your savings, and you’re free to set funds aside in a “time capsule,” a CD’s a good choice. If you’re looking to earn on your savings at a good rate while enjoying more accessibility and flexibility, then a money market account is a safer bet (as long as the minimum deposit and balance won’t be an issue for you).
Let’s take a look at an example between the two where you’re looking to earn interest on $5,000 in savings funds (these totals exclude potential taxed amounts on interest earnings):
- Money Market: With 0.05% APY^, your total balance after 5 years would be $5,012.51.
- CD: With 2.02% APY^, your total balance after 5 years would be $5,525.82.
As you can see, a CD offers a lot more interest earning potential than a money market account, especially at a long term!
Alternative Savings Options
SCCU offers a variety of savings options that will help your money make money—some are for specific purposes or age groups:
- SCCU Saving Cents: This is a round-up savings program that helps you save while you spend! Every time you swipe your debit card, the change from your purchase rounds up to the nearest dollar and automatically deposits into your SCCU Saving Cents account. You can link your SCCU Saving Cents account to an eligible SCCU checking account.
- Christmas Club Savings: If you’re tired of your wallet taking such a heavy hit during the holiday season to cover gifts, then you’ll love this type of account. You can deposit as much money as you’d like all year, which will earn a high interest. On October 31, your funds are automatically transferred into your savings account.
- Health Savings Checking: Under a high-deductible plan, you may face some unexpected medical expenses that may be hard to cover. Our Health Savings Checking offers many of the same great benefits as a Free Checking while your money grows thanks to a generous interest rate.
- IRA/IRA CDs: Both IRA and IRA CDs allow you to earn a higher interest on your savings as you plan for retirement with tax advantages.
Check out all of the
savings accounts we offer here. If you’re interested in more ways to save money,
this article provides plenty of creative ideas on how to do so.
Which is Safer: CD or Money Market?
In terms of the safety of your money, both CDs and Money Market accounts at SCCU are insured by the National Credit Union Administration (NCUA), so both are low-risk ways to earn money. While you will not lose any of your original principal with either of these accounts, the amount that you earn will depend on the type of account and terms that you choose.
Learn more about how to keep your accounts safe here.
Will I Make More Money from a CD or a Money Market Account?
In most cases, you’ll make more money from a CD, especially as CDs typically have higher interest rates. Be sure to take into consideration that your interest earnings from either a CD or a money market account are subject to taxes. For information on your individual tax obligation related to the interest income you receive from a CD or a money market account, consult your tax advisor or financial planner.
Why Choose SCCU for Your Money Market Account or CD?
As a credit union, which is a not-for-profit financial institution and cooperative, we offer competitive CD and money market interest rates. Plus, your CD or Money Market account at SCCU offer additional free benefits, including
Online and Mobile Banking with online statements. You can also receive free account alerts to keep track of your accounts.
Becoming a member of SCCU is easy! You just need to live or work in any of these
34 counties and deposit $5 into a Regular Savings account.
If you’d like to talk about which savings strategy is right for your needs,
feel free to fill out this simple form,
live chat or text us on WhatsApp, or call the office nearest you:
- Brevard: 321-752-2222
- Broward: 954-704-5000
- Miami-Dade: 305-882-5000
- All Other Areas: 800-447-7228