Money market accounts are better than CDs if you’re looking for a more accessible account.
MMA rates are typically higher than basic savings accounts and short-term CD rates.
CDs can have higher rates than a money market account, but those are often the long-term accounts from two years and upward.7 Feb 2019
What is the difference between a CD and a money market?
The biggest difference between a CD and a money market account is liquidity. CDs typically have a higher interest rate than money market accounts. Banks know they’re going to have your money longer, so they can afford to pay you a higher interest rate when you’ve deposited your money into a CD.3 Jul 2018
Why is a CD more liquid than a money market account?
A certificate of deposit is a deposit account available at banks and credit unions. CDs are also insured by the FDIC or the NCUA for up to $250,000. Like money market accounts, CDs offer a higher interest rate than a regular savings account does. The issuing bank pays you interest at regular intervals.
Are CDs safer than money market funds?
Money market funds are not guaranteed by the federal government, as are most CDs and savings bank accounts, but they’re generally quite safe due to the quality of their investments and the short-term maturities. But at most times, a money market fund doesn’t pay as much as bond funds.
Can you lose your money in a money market account?
High-risk money market fund holdings can lose value in volatile market conditions or if interest rates drop, but they can produce more income. Because they are considered investments and not deposits, money market funds are not insured against loss by the FDIC.29 Jul 2019