📋 Table of Contents
Money Market Account vs. CD
Money market accounts and CDs both typically outperform standard savings accounts, but they serve different needs — ongoing access with a variable rate versus a locked-in fixed rate for a set term.
Key Differences
| Feature | Money Market | CD |
|---|---|---|
| Rate | Variable | Fixed for term |
| Access | Anytime, often with check-writing | Locked until maturity |
| Early withdrawal | No penalty | Penalty applies |
When to Choose Each
Choose money market if: you want ongoing access and possibly check-writing capability. Choose a CD if: you have funds you won't need for a defined period and want to lock in today's rate.
Combining Both
Many savers keep an emergency fund in a money market account for flexibility, while placing additional funds they won't need soon into CDs for the potentially higher, guaranteed rate.
Common Mistakes
Assuming a CD always pays more than a money market account — the gap varies with market conditions and is sometimes minimal, making access needs the more important deciding factor.
Frequently Asked Questions
It varies with market conditions — compare actual current rates rather than assuming either type automatically pays more.
No — CDs don't offer check-writing or ongoing transaction access. This feature is specific to money market accounts (at providers that offer it) and checking accounts.