money market / Certificates of Deposit

renovation · 08-23-2007, 10:19 PM

whats the diffrents between the 2 types of savings ?

zippyjuan · 08-24-2007, 12:07 AM

A CD is a loan you make to a bank for a specified period of time and has a guaranteed rate of return specified at the time you make the loan. It does not change during the term of the CD. A money market fund or money market account is tied to a bunch of investments and the rate you get is adjusted periodically. It can go up or down. With a CD you have to pay a penalty if you need to get to your money before it matures while a money market you can get in and out of more easliy.
http://www.associatedcontent.com/art...e_deposit.html

Quote:

The Money Market account is a flexible type of account. You can add and take out money anytime you want. However the interest rate is not as high as the CD account. You need to make a minimum deposit in order to have a Money Market account. For example, at Golden One banks you need to put a minimum deposit of $2,500 dollars. The deposit may vary with each bank but it's usually around that much money. How much interest you get from the money depends on the interest rate at the time you made the deposit.

The CD account is a locked account. You earn a higher interest rate on your money than a Money Market account however your money will be locked for a certain time period. You cannot add or take out funds. There are penalties for early withdrawal. You will actually lose some of the interest you gained on the money. The longer you leave it in the account the higher the interest rate. At most banks you can leave the money in the account starting at three months and going as long as five years. Like the Money Market account you need to make a minimum deposit in order to have a CD account. For example, at Golden One they require you make a minimum deposit of $1,000 dollars.

The type of interest bearing account is right for you depend on your situation. How much money do you want to put into the account? Do you need the money right away? What do you want to use the money for? For example, if you only have $1,000 dollars and don't need to money for at least three months then you might want to put it in a CD account. However, if you have over $2,500 dollars and you are not sure if you are going to get a new car in the next six months then a Money Market account might be for you.

Whichever account you decide on it will be better than placing it in a regular savings account. The benefit of a Money Market and CD account are both great. Deciding on a Money Market or CD account will depend on your life situation. Ask yourself those questions to help you decide which account you can most benefit from.

08-23-2007, 10:19 PM	#1
renovation Admiral Join Date: Jan 2003 Location: You could pick up Lindsay Lohan for less than a intel 990x, and still have money left over to bail her outta jail Posts: 5,029	money market / Certificates of Deposit whats the diffrents between the 2 types of savings ? __________________ You could pick up Lindsay Lohan for less than a intel 990x, and still have money left over to bail her outta jail

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