Savings Accounts vs. CDs

What’s the smartest path when you want to save money? The truth is that you have a lot of choices, and all of them have their pros and cons. However, two of the most common choices are savings accounts and CDs. Are you deciding between the two? Then let’s take a closer look at these choices.

Which is Which?

You’re probably already familiar with the concept of a savings account. A savings account simply gives you a place to store your money for a while. While you can make a few withdrawals from your savings account, those withdrawals should be few and far between. The money in your savings account earns interest every month. As a result, when you put your money into savings, you help it grow.

Then there’s the CD option. In this case, CD stands for Certificate of Deposit. Like a regular savings account, it gives you a safe place to store your money. However, you must commit to a specific amount of time before you can withdraw any money from it. You can find one-year CDs, five-year CDs, and more. CDs also earn interest.

Savings Accounts Give You Flexibility

So, which option should you choose? If you need some flexibility, go with a savings account. You can withdraw money from a savings account every once in a while without any fees or financial penalties. A savings account is a good choice if you want an emergency fund or to save money for something specific.

CDs Give You Better Interest

A CD doesn’t have the same flexibility as a savings account, but it does give you a better interest rate. Once you put your money into a CD, you’ll need to commit to that CD’s timeframe unless you’re willing to pay a penalty. However, because CDs offer higher interest rates than savings accounts, they’re a good choice if you want to grow your money with minimal risk.

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Get the Most of Both

Whether you choose a CD, a savings account, or even both, you’ll want to make sure that you get the most from them. With both choices, look for high interest rates, minimal fees, and terms that fit your specific needs. Not all savings accounts or CDs are the same, so do some research before you make a commitment. Bundlefi can help you with that research. With Bundlefi, you can compare banks and credit unions in one place. You’ll eliminate the confusion so that you can find exactly what you need. Take a look at Bundlefi today to start comparing your options.