Checking Accounts: Checking accounts offer a simple, quick way to access your money. You can deposit as often as you like, and most banks will give you an ATM card to use at stores or withdraw cash from an ATM. You can write checks using this account as well.

  • Some checking accounts pay interest. These are called negotiable order of withdrawal (NOW) accounts. The most common type is the demand deposit account, which does not pay interest.
  • There are often fees associated with checking accounts. Some banks charge a monthly maintenance fee regardless of the balance. Some charge a monthly fee if the account balance falls too low. There may also be transaction fees, check fees, or ATM withdrawal fees.

Money Market Deposit Accounts (MMDA): A MMDA is an account which accumulates interest, usually at a higher rate than a checking or savings account. However, you will need to meet or exceed a certain balance in the account to gain that interest. The interest rate may rise as the balance grows.

  • You can write checks from a MMDA, but it’s not as easy to withdraw from an MMDA. You are limited to 6 transfers per month, and only 3 of those transfers may be in the form of a check. There are usually transaction fees associated with MMDA’s.

Savings Accounts: You can withdraw from a savings account, but there may be a cap on the number of withdrawals and transfers.

  • Minimum balance fees may apply to savings accounts.

Credit Union Accounts: These accounts are very similar to bank accounts, with different titles.

  • A share draft account is equivalent to a checking account, a share account is equivalent to a savings account, and a share certificate account is equivalent to a certificate of deposit account.
  • Credit Unions may charge less than banks for these services.

Certificates of Deposit (CD): CDs offer a set rate of interest for a certain term, from a few days to several years.

  • Typically, you can’t withdraw your money until the end of the term, but some banks will allow you to withdraw the interest earned.
  • Return rates are usually higher for these accounts since the term is set.
  • The fees for withdrawing early can be very steep, and will take away from your interest and potentially even the principal investment.
  • Your bank will notify you when the CD has matured, but many CDs automatically renew. Pay attention to the maturity date if you want to withdraw your money before the CD begins a new term.