Types of Personal Savings Accounts

Basic checking account

An account in which you deposit money in a bank, credit union, or other financial institution; make withdrawals; and possibly accumulate a small amount of interest.

 

Money Market Deposit Account (MMDA)

MMDAs are like traditional personal savings accounts, but they may offer higher interest rates and usually allow you to make more frequent withdrawals.

 

Certificate of Deposit (CD)

By purchasing a CD from a bank, you agree to deposit money and leave that money in the bank for a specified amount of time. After that period of time, the CD matures and you can withdraw the entire principal deposit plus any interest it accumulated. Interest rates for CDs are usually higher than interest for traditional savings accounts since you agree not to make a withdrawal for a set amount of time. If you withdraw any funds from the CD before it matures, you will have to pay a penalty.