Money Moves

Money Moves

The knowledge you need to put your best financial foot forward.

  • Personal Finance
What Deposit Accounts Are Right for You?

When it comes to managing your finances, understanding the various banking products available to you is crucial. Each type of account - be it a Money Market Account, a traditional Savings Account, a Share Certificate, or a Checking Account - offers unique features and benefits tailored to different financial goals. Whether you're looking to grow your wealth, save for a particular milestone, or simply handle everyday transactions efficiently, there's an account designed to meet your needs. In this article, we'll dissect these four types of accounts, comparing their characteristics and identifying the types of financial goals they're best suited for.

Checking Accounts

Checking accounts are the best option for everyday spending such as regular purchases, bill payments, ATM withdrawals, etc. Unlike other types of accounts, checking accounts typically don't limit the number of transactions you can make each month, offering unparalleled access and convenience to your funds. They’re an ideal tool for short-term financial planning and budgeting.

Have access to your funds when and where you need them. See if a checking account is right for your financial needs:

  • Can withdraw cash, write checks, or make online payments directly from this account
  • No limit on the number of transactions you can make
  • Many financial institutions offer features that allow you to make person-to-person payments via email or phone number with a linked checking account
  • Typically have no monthly fees or minimum balance requirements
  • Link your account to your digital wallet (Apple Pay ™, Samsung Pay ™, Google Pay ™, etc.)

Share Certificates

Share Certificates, commonly known as Certificates of Deposit (CDs) when issued through banks, are a form of time deposit offered by credit unions. The premise behind a Share Certificate is simple: you agree not to touch the funds for a set period, and in turn, the financial institution pays you interest. It's an ideal saving tool for individuals with long-term financial goals who can afford to put their money aside without needing immediate access to those funds.

Have your money go the extra mile. See if a share certificate is the right fit for your financial goals:

  • In general, longer term certificates pay higher rates
  • Fixed term lengths allow for easy financial planning
  • Generally offer higher rates than those available on checking, savings, or money market accounts
  • All funds invested are federally insured by the National Credit Union Administration (NCUA) up to $250,000 
  • You won’t be able to access your funds before the term ends. (Not without paying a penalty.)

Money Market Accounts

 Money Market Accounts (MMAs) are an excellent choice for individuals who want to combine the earning potential of a savings account with the accessibility of a checking account. Unlike share certificates, MMAs allow members to access their funds whenever necessary while typically yielding higher interest rates than regular savings accounts. While there are some caveats, MMA’s are a great option for those looking to invest a large lump sum while maintaining access to funds.

Take a look at some of the features of MMAs to see if they’re the right fit for your financial goals:

  • Combine the liquidity of checking accounts with yield rates higher than traditional savings accounts
  • Money can be conveniently withdrawn using an ATM
  • Deposits are federally insured by the National Credit Union Administration (NCUA) up to $250,000
  • Large initial deposit
  • 6 withdraw limit per month

Savings Accounts

Savings accounts are a great option for building that rainy-day fund and encouraging a habit of saving for the future. While they offer lower interest rates compared to MMAs, they generally have lower minimum balance requirements, making them more accessible to a broader range of individuals. Savings accounts are ideal for stashing away funds for long-term goals, unexpected emergencies, or significant future purchases, providing a safe and insured place for your money to grow over time.

Looking to build a rainy-day fund? See if a savings account is the right fit for your goals:

  • Easy to open, typically require a small initial deposit
  • Will have some interest accumulation, lower interest rates than other accounts
  • Can be used for automatic payments and direct deposits
  • Link to checking account for easier fund transfers
  • Helps promote healthy financial habits

In conclusion, understanding the nuances of different types of bank accounts can empower you to make informed decisions about managing your finances. Whether it's the high-interest earnings and liquidity of Money Market Accounts, the day-to-day convenience of a Checking Account, or the secure, long-term growth potential of a Savings Account or Share Certificate, every account type serves a unique purpose tailored to specific financial goals. Remember, the key to effective financial planning is aligning your choice of account with your personal financial targets and leveraging the benefits they offer. Investing time in understanding these financial tools can pave the way for financial stability and growth.

The information and topics featured are for informational purposes only and does not constitute legal, tax or financial advice. All financial situations and circumstances are different and may not apply to the specific information provided. Seek the advice of a financial professional, tax consultant, or legal counsel to obtain guidance specific to your needs.