Difference Between Certificate of Deposit and Savings Account

What Is a Certificate of Deposit?

When Should You Choose Certificate of Deposit?

What Are the Things to Keep in Mind Before Investing in a Certificate of Deposit?

What Are the Drawbacks Associated with Certificate of Deposit?

What Is a Savings Account?

When Should Choose a Savings Account?

What Are the Things to Keep in Mind Before Investing in Savings Account?

What Are the Drawbacks Associated with Savings Accounts?

Frequently Asked Questions

Which among CD and savings accounts is a safe investment option? up-arrow

A certificate of deposit is a safer investment option when compared to a savings account. This is mainly because CDs restrict fund access, which does not happen in the case of savings accounts. This increases the chance of fraud in savings accounts.

What is the minimum tenure available for CDs and savings accounts? up-arrow

Banks allow you to select tenure between three months to a year for certificates of deposits. On the contrary, a savings account has no restriction or maturity period. This ensures that you do not have to worry about your savings accounts.

Which among CDs and savings accounts offer higher interest rates? up-arrow

Certificates of deposits usually offer a higher interest rate when compared to a savings account. Investing in CDs allows you to build wealth and keep that money safe. However, a savings account makes your money more accessible.

What are the similarities between CDs and savings accounts? up-arrow

Both CD and savings accounts allow you to deposit money at your convenience and earn interest. Thus, they can help you build a savings habit and generate additional monthly funds.