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Money Market Accounts vs. CDs: Which Is Best for You?

Money Market Accounts vs. CDs: Which Is Best for You?

Your hard-earned cash is important, and when it comes to managing it, you have several options, among them Money Market Accounts (MMAs) and Certificates of Deposit (CDs). Both types of savings vehicles have evolved to offer many important features and benefits, and the comprehensive selection available from Discover lets savvy savers find the best choices for their entire range of needs.

Whether you opt for MMAs, CDs or both, you'll find that Discover offers the interest rates, flexibility and added features you need for managing your assets. Discover's CDs, for example, feature great rates with guaranteed returns, flexible terms and the opportunity to transfer interest to another account. With Discover MMAs, you'll enjoy competitive returns with easy access to your cash anytime.

A Safety Net

Both Money Market and CD deposits are insured by the Federal Deposit Insurance Corporation (FDIC) for amounts up to $250,000 per depositor per ownership category at an insured financial institution such as Discover. The backing of the federal government provides an added assurance that your funds are safe up to the FDIC threshold.

Key Differences

The differences between MMAs and CDs center on interest rates, the potential for conveniences such as check writing, and your ability to make withdrawals without forfeiting interest. That's why Discover gives you so many convenient choices.

  • Interest rates. If you like the certainty of a fixed rate of interest, consider a CD. Historically, most CDs have paid a fixed rate, often slightly higher than MMAs and other savings vehicles. The interest rate offered by a CD is determined at the time you deposit your money. Most financial institutions offer higher rates of interest on CDs with longer terms. Interest rates on MMAs, in contrast, fluctuate depending on market conditions.
  • Liquidity. CDs sometimes are referred to as term accounts because the CD matures after a specified period of time, when investors receive the principal that was deposited along with accrued interest. If you withdraw funds or close the account prior to maturity, you usually will lose interest that would have been paid for the remainder of the term and may also pay an early withdrawal penalty. For this reason, a CD may be a good option if you are certain that you will not need the money prior to maturity. MMAs, in contrast, have no maturity date and permit a limited number of withdrawals. A MMA may be a good choice if you need access to your cash periodically but on a less frequent basis compared with a checking account.
  • Added features. MMAs may offer conveniences such as check writing, access to an automated teller machine (ATM) and others. CDs, in contrast, do not offer these features because your money is deposited for the term of the account. With Discover's Money Market Account, you can access your funds by check, debit card, online or ATM (subject to certain monthly transaction caps). You can even arrange for free online money transfers and bill pay from your account. You can also make automatic transfers to your account from a checking or savings account.


Before deciding whether a CD or a MMA is best for you, ask yourself the following questions:

  • How soon will I need access to the money?
  • Are check writing or ATM access important?
  • Is there a minimum balance?
  • What are the fees associated with the account?
  • Are there steps I can take to achieve a higher rate of interest? If yes, are there trade-offs that I need to understand?

Regardless of your savings priorities, Discover's CDs and MMAs provide the tools you'll need to bring your goals within closer reach.


Discover offers a full range of CDs and IRA CDs with terms from 3 months to 10 years as well as Money Market and Online Savings Accounts. Open an account online in minutes or call our 24-hour U.S-based Customer Service at 800-347-7000.

The article and information provided herein are for informational purposes only and are not intended as a substitute for professional advice.