Short answer
High-yield savings and money market accounts have variable rates and open access. CDs have fixed rates and a penalty. All are insured to $250,000 at FDIC banks or NCUA credit unions.
1. At a glance
| Feature | CD | High-yield savings | Money market account | Traditional savings |
|---|---|---|---|---|
| Rate | Fixed | Variable | Variable | Variable, usually low |
| Access | Locked to maturity | Open, transfer limits may apply | Open, may have checks or a debit card | Open |
| Early withdrawal | Penalty | None | None | None |
| Minimum | Often required | Low or none | Often required | Low |
| Best for | Money you will not need | Emergency fund | Savings you also spend from | Small, everyday balances |
2. Insurance
Deposits at FDIC-insured banks and NCUA-insured credit unions are covered up to $250,000 per depositor, per institution, per ownership category. This applies to all four account types.
3. Money market account vs money market fund
A money market account is a bank deposit and is insured. A money market fund is an investment product, is not FDIC insured, and can lose value in rare cases.
4. Why the rate gap matters
$20,000 earns $800 a year at 4.00% and $20 a year at 0.10%. A difference of 3.9 percentage points is $780 a year on that balance.
5. How to choose
- Need the money any time: high-yield savings.
- Want to write checks or use a debit card: money market account.
- Will not need it for a set time and want a fixed rate: CD.
- Check fees and minimums before you open any account.
6. Frequently asked questions
What is the difference between a HYSA and a money market account?expand_more
Both have variable rates and open access. A money market account may add check writing or a debit card, and often needs a higher minimum balance.
Are all savings accounts FDIC insured?expand_more
Accounts at FDIC-insured banks are covered up to $250,000 per depositor, per bank, per ownership category. Credit unions have NCUA coverage.
Is a money market fund the same as a money market account?expand_more
No. A money market fund is an investment product and is not FDIC insured.
Which account has the highest rate?expand_more
It changes with the market, so compare current APYs. CDs and HYSAs usually pay more than traditional savings.