- Checking accounts are the most liquid of the accounts--followed by savings and money-market accounts. Certificates of deposit offer limited liquidity, as you pay a penalty if you withdraw before maturity.
- Savings and money-market accounts often are used to compile emergency funds. Financial advisers suggest that you have enough money in an emergency fund to cover expenses for three to six months.
- The Federal Deposit Insurance Corp. insures savings accounts, checking accounts, money-market accounts and CDs for up to $250,000 per depositor per financial institution.
- Savings and checking accounts usually have the lowest balance requirements, while money-market accounts carry higher minimum-balance requirements. Certificates of deposit carry a variety of balance requirements that can be adjusted for each investor.
- Money-market accounts provide higher rates of interest than savings or checking accounts. CD rates generally are highest among the bank accounts and are dependent on the maturity term. Savings accounts usually pay less interest than all but checking accounts, which usually do not pay interest.
