Money Market vs. CD – Choose what’s best for you


Hands of a father, mother, and a daughter's hands holding a piggy bank with coins laying around
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Is it better to put your money in a money market account or a certificate of deposit (CD)? That’s a question many of our members ask themselves every day. There really isn’t a right or wrong answer. More often than not, it depends on how much flexibility you want when it comes to withdrawing your money. Accounts that pay higher interest normally have more withdrawal restrictions.

A money market account typically earns a variable interest rate. On the other hand, a CD usually means your interest rate will not vary over the term of the CD. The National Credit Union Association (NCUA) federally insures both types of accounts. As a Consumers member, your funds are federally insured by the NCUA to at least $250,000, so your money is protected no matter which option you choose.

If you’re willing to exchange limited access to your money for a higher interest rate – meaning you will not need to withdraw your money over the term of the CD, usually six months or more – a CD may be a good option. If you do need to get to   your money before the CD matures, you will most likely incur an early withdrawal penalty.

Consumers’ CD terms range from six months to five years, with minimum opening deposits starting as low as $1,000. From time-to-time, we also offer promotional CDs with special rates and terms. Typically, the longer the term, the better the interest rate.

Money Market accounts are similar to savings accounts, but tend to pay higher interest. However, to earn the higher rate, you will likely have to meet minimum deposit requirements. Consumers’ investment levels start at $2,500. As your balance increases, so will your rate of return. There are no monthly fees and 24-hour access is available through online banking.

The type of account you choose doesn’t have to be an either/or choice. If you’re saving for a long-term goal, then a CD may be a good option. For shorter-term goals or even an emergency fund, a money market account might be just the ticket. And if you find yourself needing more frequent access to your money for everyday expenses, you may want to consider something like a high yield checking account instead.

We can help you open up a CD account or high interest money market account at any of our locations throughout West Michigan. If you have any questions, please call us at 800.991.2221.

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  1. April Cook says:

    I’m starting to think more about saving for my future and investing some of my money. I like that with a money market account you would have 24-hour access through online banking. Does this mean you can withdraw the money at any time? Thanks for the information!

    • Hi April, that is correct, but you must maintain a minimum balance to receive the interest. If you’d like to learn about more investing options please contact any of our offices and they will set you up with a complimentary appointment with a Investment Services Representative.

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