By Timothy Kelheart When it comes to saving money and gaining interest on your savings it is important to know the different benefits you can get with a Savings Account vs. a Certificate of Deposit (CD). A Savings Account will allow you to have ‘unlimited’ access to your money and you can mov...

By Timothy Kelheart

When it comes to saving money and gaining interest on your savings it is important to know the different benefits you can get with a Savings Account vs. a Certificate of Deposit (CD).

A Savings Account will allow you to have ‘unlimited’ access to your money and you can move it at any time, but with this freedom to take your money at any time you will receive very low interest rates. If you are simply trying to hide money from yourself in a saving account versus having it in a checking account that can easily be accessed for anything you want to buy than this might be the preferred option for you. If you can commit to putting money away and not having access to it for a higher interest rate than CDs are a better option for your money.

 
CDs can give you a high interest rate to have your money stay at the bank or credit union for a set number of years, 2 or 3 is typical but it can vary by what the financial institution offers. By committing your money to a set time period you can receive a higher interest rate than you would with a Savings Account. Make sure to read the fine print; if you need to pull your money out of a CD before it reaches maturity (the time the CD lasts for) you can get hit with several high fees that will likely result in you getting less money than you put into the CD when you started.

 
Short Term Saving Options vary in the saver’s ability to access their funds and the interest the financial institution is willing to give the saver for their deposit. If you can put your money away and do not touch it for a few years than a CD is the better option as the interest will be worth it. On the contrary if you need access to your savings and are not able to keep your hands off your money than a Savings Account is right for you! Before you make a decision take the time to consult with your bank and find the best suited option for your hard earned money.