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By: Ikedi Ani-okoye

Certificate of Deposit Vs Savings Account: What Fits You?

Saving money, and investing are the same thing for a lot of people. A good way to invest your money, without risking any of it, is to open a certificate of deposit account.

A certificate of deposit account, is an account that has a time limit on in, which means you can't withdraw the money whenever you feel like it. For this, you are given high interest rate on your money, but you can't withdraw money before the fixed period.

You can find some of the pros and cons of investing in a savings account and a certificate of deposit account below:

Having a savings account, and a certificate of deposit account, is basically a risk-free investment. This means that if the bank that you are saving with collapses, your money will be protected. These are probably some of the only risk-free investments you can ever make.

The big difference, between a savings account, and a certificate of deposit account is the fact that the CD has a fixed period. This can be anywhere from three months to 5 years before you are allowed to access the money. With a savings account, you can access the money whenever you want. Most banks will offer you a high interest rate, if you are willing to invest the money with them for a longer period of time.

Choosing a savings account

Choosing between a savings account, and a certificate of deposit account, is a decision that should be made, after you have decided how much interest you can get back. You also need to decide whether or not you can be without your money for a fixed amount of time.