Money market vs. CD: Which one is right for me?

A money market account usually gives you more access to your money than a certificate of deposit (CD), which usually asks you to leave your money in place for a set amount of time. The better choice depends on when you may need the funds, the rate offered and the account terms.

This guide compares access, interest rates, fees and withdrawal rules so you can choose a savings option that fits your goals.

Key takeaways

• A money market account generally offers more access to your money than a CD. Some accounts limit the number of withdrawals or transfers.
• A CD generally holds your money for a set term. Withdrawing early may mean paying a penalty.
• Money market rates may change over time. CD rates are generally fixed for the term.
• Rates, minimum deposits and fees vary by bank, account and term, so neither option always earns more.
• Bank money market accounts and CDs can be FDIC-insured. Money market mutual funds are not.

Money market account vs. CD: what’s the difference?

The main difference is how you can use your money. A money market account is generally built for savings you may need to access. A CD is generally built for money you can set aside until a certain date.

Terms vary by account. Review the account disclosures before you choose.

To see what Regions offers, explore Regions savings options.

What is a money market account?

A money market account is a type of savings account offered by a bank. It generally lets you earn interest while keeping your money more accessible than funds in a CD.

Here is what to know:

• Access: Many money market accounts let you move or withdraw money when you need it. Some limit the number of transactions, so review the account terms.
• Interest: The rate may change over time. It may be higher or lower than the rate on a CD, depending on the bank and the market.
• Requirements: Some accounts need a minimum opening deposit or a minimum balance. Some charge fees if the balance falls too low.

A money market account at a bank is different from a money market mutual fund. A mutual fund is an investment product and is not a bank deposit.

Learn more about the Regions money market account.

What is a certificate of deposit (CD)?

A certificate of deposit, or CD, is a savings account with a set term. You agree to leave your money in the CD until it matures. In return, the bank generally sets the interest rate for that term.

Here is what to know:

• Term: CD terms vary. When the term ends, the CD reaches its maturity date.
• Rate: The rate is generally set when you open the CD and stays the same for the term.
• Early withdrawal: If you take money out before the maturity date, you may pay a penalty. The terms vary by CD.
• Minimum deposit: Some CDs require a minimum amount to open.

It helps to plan around when you will need the money. A CD may be a good fit when you know you will not need the funds until the term ends.

Learn more about Regions CD accounts.

Money market account vs. CD: Which is better for your savings goals?

The right choice depends on your goal, your timeline and how soon you may need the money.

Consider a money market account if:

• You want savings you can access if something comes up.
• You are saving for an expense and are not sure when it will happen.
• You are building an emergency fund.

Consider a CD if:

• You know when you will need the money, such as a planned expense a year or more away.
• You are comfortable leaving the money untouched until the term ends.
• You like knowing the rate will stay the same for the term.

Money for emergencies usually needs to be easy to access. Money for a planned goal can often wait. Some people use both, building an emergency fund in an accessible account and setting aside other savings in a CD.

Not sure how much to set aside? Try the emergency fund calculator.

What to compare before you open an account

Rates, minimums and fees can change. Before you choose, review the current details for each account:

• Interest rate: Ask how the rate is determined and whether it can change.
• Opening deposit: Check whether the account requires a minimum to open.
• Ongoing balance: Check whether you need to keep a minimum balance.
• Fees: Look for monthly fees or other charges.
• Access: Ask about withdrawal or transfer limits.
• CD term and penalty: For a CD, check the term length and the early withdrawal penalty.
• Deposit insurance: Confirm the account is FDIC-insured.

You can review current details on the Regions savings page and the Regions CD account page.

Are money market accounts and CDs FDIC-insured?

Yes, when they are deposit accounts at an FDIC-insured bank. The FDIC insures deposits up to $250,000 per depositor, per insured bank, for each account ownership category. Coverage depends on how your accounts are owned.

A money market mutual fund is different. It is an investment product, not a bank deposit, so it is not FDIC-insured.

Learn more about what the FDIC is and what it does. You can also read the FDIC’s guides, Your Insured Deposits and Deposits at a Glance.

Ready to compare your savings options?

Review current account details, then choose the option that fits your goal and timeline. Explore Regions savings options or learn more about Regions CD accounts.

Compare Regions savings options