CDs and Money Market Deposit Accounts (MMDA) are interest earning accounts. A CD is a time account, whereby you promise to the bank that you will leave this set amount of money on deposit for a predetermined period of time. In return, you get a high rate of interest. CDs pay more interest than most other deposits. If you try to cash your CD in early, expect to pay a penalty.
A MMDA earns more interest than a typical savings account, or equal to it, but often has a minimum deposit of around $2,500. Your bank may have different threshholds and often the more you deposit, the higher your rate of interest. MMDAs allow withdrawals and some of these may be by check, but you are limited to six per month. If you exceed that, expect to pay a penalty and if you exceed that too often (three times in a twelve month period) your bank may tell you the account must be closed. Banking laws are strict on this.
BankingQuestions.com is a free service made possible by the generous support of our advertisers. Advertisers are not responsible for site content. Please help us keep BankingQuestions.com FREE by supporting our advertisers. When you see an ad for a product or service you may have an interest in, click through to learn more.
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
CDs and Money Market Deposit Accounts (MMDA) are interest earning 