- A money market account is a type of savings account offered by banks and credit unions. Like a traditional savings account, money markets are relatively safe, since they are typically FDIC insured. They require a larger deposit (often as least $1000) but offer a higher interest rate.
- A money market fund is a low-risk investment for CDs or government securities. The risks associated with a fund are higher than with a money market account. They're also typically not FDIC insured.
- A CD is a low-risk (often FDIC insured), fixed rate savings account provided by your bank or credit union that offers a slightly higher interest rate than a traditional savings plan. Typically, a large deposit is required (often at least $1000), which is locked in for a term of 6 months to 5 years. During that time, your money is not accessible, without incurring a penalty.
- A CP is an extremely short term, unsecured note provided by corporations. They typically last from 30 to 270 days.
- A T-Bill is a government security sold at a discount in terms anywhere from days to one year. When it matures, you are paid the face value.
