Page 43 - Book4E

While banks and credit unions differ in the scope of services available for money market accounts, most will offer the following similar features:
• A higher yield on your deposit than a traditional savings account.
• Easy access to your money through checks and a check or debit card.
• Standard money market restrictions of six transactions per statement cycle.
• A minimum opening deposit of $50.
• No monthly service fees when you maintain a $500 minimum balance.
• FDIC-insured up to $250,000 per depositor.
Certificates of Deposit and Other Low-Risk, Long-Term Savings Instruments
Certificates of Deposit, or CDs, which are also known as Time Accounts, combine the benefits of both savings accounts and invest- ment accounts. Such accounts are best suited for those individuals who don’t need to access their money right away.
In the past, when you opened a traditional CD, the deposit was represented by a paper certificate, which had to be presented and surrendered in order to withdraw funds or close the account. Banks today don’t typically issue a paper certificate; the deposit is tracked by an account number instead. Banks use the term “Time Account” in addition to the Certificate of Deposit or CD.
In a nutshell, here’s how CDs generally work:
• First, you lock in the interest rate you will earn for a specific amount of time (known as the term).
Savings Accounts 33