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Money Market vs. CD: What’s Better?
CDs have higher rates but offer less access to your money than MMAs.
Margarette Burnette is a NerdWallet authority on savings, who has been writing about bank accounts since before the Great Recession. Her work has been featured in The Associated Press, USA Today and other major newspapers. Before joining NerdWallet, Margarette was a freelance journalist with bylines in magazines such as Good Housekeeping, Black Enterprise and Parenting. She is based near Atlanta, Georgia.
Spencer Tierney is a consumer banking writer at NerdWallet. He has covered personal finance since 2013, with a focus on certificates of deposit and other banking-related topics. His work has been featured by The Washington Post, USA Today, The Associated Press and the Los Angeles Times, among others. He is based in Oakland, California.
Tony Armstrong leads the banking team at NerdWallet. He has covered personal finance for over a decade. Tony began his NerdWallet career as a writer and worked his way up to editor and then to head of content on the banking team. His writing has been featured by the Los Angeles Times, MarketWatch, Mashable, Nasdaq.com, USA Today and VentureBeat. Tony lives in Minneapolis, Minnesota.
Wealth psychology expert and coach Kathleen Burns Kingsbury, founder of KBK Wealth Connection and host of the Breaking Money Silence podcast, is an internationally published author and speaker. As an expert on financial psychology, Kathleen has appeared on television and her work has been featured in The New York Times, The Wall Street Journal, "PBS NewsHour," Money magazine, Today Money, Forbes and CNBC. Kathleen served as an adjunct faculty member at the McCallum Graduate School at Bentley University from 2009 to 2019 and currently teaches at Champlain College.
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Money market account vs. CD: The difference
Money market accounts (MMAs) and certificates of deposit (CDs) are types of federally insured savings accounts that earn interest. But their rates and ease of access differ.
CDs tend to have higher rates than money market accounts, but give no access to your money until a term ends. Funds get locked up for a set period of months or years, and withdrawing early typically results in a penalty, such as several months to a year’s worth of interest. Most often, CD rates are fixed. (Learn more about CD basics.)
Money market accounts usually offer access to funds and rates comparable to regular savings accounts. They allow you to withdraw money without penalty, but rates are subject to change over time. MMAs generally have larger minimum balance requirements and sometimes offer checks. MMAs can also be called money market savings or money market deposit accounts, and they differ from money market funds, which are a type of investment.
How would you think about deciding between a CD and a money market account?
Tony Armstrong
Head of Content, Banking
This is a highly individualized decision. I've found that a person's savings goal should determine which product they choose. Look at it this way: If you're setting money aside for unexpected emergencies and need that cash to be accessible, go with a money market account with a high rate. If you're saving up for a one-time purchase and don't want to dip into those funds for any other reason, a high-yield CD would be a great choice.
This is a highly individualized decision. I've found that a person's savings goal should determine which product they choose. Look at it this way: If you're setting money aside for unexpected emergencies and need that cash to be accessible, go with a money market account with a high rate. If you're saving up for a one-time purchase and don't want to dip into those funds for any other reason, a high-yield CD would be a great choice.
Tony Armstrong
Head of Content, Banking
Margarette Burnette
Banking Senior Writer
I’d consider how comfortable I am locking away my money for a certain length of time. A CD locks away cash for the length of the term. That’s not always a bad thing. If you want to make sure you can’t touch the funds, you can put it in a CD and probably earn more interest than with an MMA. But if you can’t predict when you’ll need your money, and you also like the idea of accessing your cash with a debit card or check, an MMA could be better.
I’d consider how comfortable I am locking away my money for a certain length of time. A CD locks away cash for the length of the term. That’s not always a bad thing. If you want to make sure you can’t touch the funds, you can put it in a CD and probably earn more interest than with an MMA. But if you can’t predict when you’ll need your money, and you also like the idea of accessing your cash with a debit card or check, an MMA could be better.
Margarette Burnette
Banking Senior Writer
Tony Armstrong
Head of Content, Banking
This is a highly individualized decision. I've found that a person's savings goal should determine which product they choose. Look at it this way: If you're setting money aside for unexpected emergencies and need that cash to be accessible, go with a money market account with a high rate. If you're saving up for a one-time purchase and don't want to dip into those funds for any other reason, a high-yield CD would be a great choice.
This is a highly individualized decision. I've found that a person's savings goal should determine which product they choose. Look at it this way: If you're setting money aside for unexpected emergencies and need that cash to be accessible, go with a money market account with a high rate. If you're saving up for a one-time purchase and don't want to dip into those funds for any other reason, a high-yield CD would be a great choice.
Tony Armstrong
Head of Content, Banking
Margarette Burnette
Banking Senior Writer
I’d consider how comfortable I am locking away my money for a certain length of time. A CD locks away cash for the length of the term. That’s not always a bad thing. If you want to make sure you can’t touch the funds, you can put it in a CD and probably earn more interest than with an MMA. But if you can’t predict when you’ll need your money, and you also like the idea of accessing your cash with a debit card or check, an MMA could be better.
I’d consider how comfortable I am locking away my money for a certain length of time. A CD locks away cash for the length of the term. That’s not always a bad thing. If you want to make sure you can’t touch the funds, you can put it in a CD and probably earn more interest than with an MMA. But if you can’t predict when you’ll need your money, and you also like the idea of accessing your cash with a debit card or check, an MMA could be better.
Margarette Burnette
Banking Senior Writer
Tony Armstrong
Head of Content, Banking
This is a highly individualized decision. I've found that a person's savings goal should determine which product they choose. Look at it this way: If you're setting money aside for unexpected emergencies and need that cash to be accessible, go with a money market account with a high rate. If you're saving up for a one-time purchase and don't want to dip into those funds for any other reason, a high-yield CD would be a great choice.
This is a highly individualized decision. I've found that a person's savings goal should determine which product they choose. Look at it this way: If you're setting money aside for unexpected emergencies and need that cash to be accessible, go with a money market account with a high rate. If you're saving up for a one-time purchase and don't want to dip into those funds for any other reason, a high-yield CD would be a great choice.
Tony Armstrong
Head of Content, Banking
Margarette Burnette
Banking Senior Writer
I’d consider how comfortable I am locking away my money for a certain length of time. A CD locks away cash for the length of the term. That’s not always a bad thing. If you want to make sure you can’t touch the funds, you can put it in a CD and probably earn more interest than with an MMA. But if you can’t predict when you’ll need your money, and you also like the idea of accessing your cash with a debit card or check, an MMA could be better.
I’d consider how comfortable I am locking away my money for a certain length of time. A CD locks away cash for the length of the term. That’s not always a bad thing. If you want to make sure you can’t touch the funds, you can put it in a CD and probably earn more interest than with an MMA. But if you can’t predict when you’ll need your money, and you also like the idea of accessing your cash with a debit card or check, an MMA could be better.
Margarette Burnette
Banking Senior Writer
When to choose a money market account over a CD
You want the option to add and withdraw money regularly. With money market accounts, you don’t have to wait for a term to expire before making a withdrawal. Keep in mind, however, that some MMAs have withdrawal restrictions that are similar to those of regular savings accounts: six per month, not counting in-person or ATM withdrawals. These restrictions vary by bank; some may not impose any limits, while others may charge a penalty for going beyond six.
You’re looking for checking account-like perks. Some MMAs offer debit cards, ATM access and check-writing abilities — features often seen with checking accounts.
You prefer the balance of a solid rate and easy access. Along with convenient ways to access your money, some MMAs offer strong interest rates.
Annual Percentage Yield (APY) is accurate as of June 17th, 2025. Start earning 2.50% APY, then qualify to earn 5.00% APY on your balance up to $5,000.00 and 2.50% APY on balances over $5,000 next month by 1) Receiving direct deposit(s) totaling $1,000 or more; and 2) Ending the month with a positive balance in all your Varo Accounts. No fees, no minimums required. Rates subject to change at any time.
This offer is only valid for a new Premium Savings Account (“PSA”). The Promotional Annual Percentage Yield (“Promotional APY”) will be automatically applied to the account, and will remain effective for 180 days (the “Promotion Period”), after which it will automatically revert to the Standard Annual Percentage Yield (“Standard APY”) without requiring any action from you. Accounts must be opened by 6/9/26 to qualify for the Promotional APY. No minimum balance required, and the offer may be withdrawn at any time. Excludes non-U.S. residents, and residents of any jurisdiction where this offer is not valid. Other restrictions may apply. Please visit etrade.com/premiumsavings for more information.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
The Base Annual Percentage Yield (APY) is 3.30% (from program banks) as of 1/30/26 and is subject to change. Eligible new clients can get a 0.75% APY boost over the base APY for 3 months on up to a $150k balance. The Direct Deposit Plus Investing Program from Wealthfront Advisers LLC and Wealthfront Brokerage LLC provides eligible clients a 0.25% APY increase above the base APY on eligible Cash Account balances. Wealthfront may change or end the program at any time and determine eligibility at its discretion. Terms apply. Full details at wealthfront.com/promo-terms. Cash Account offered by Wealthfront Brokerage LLC, Member FINRA/SIPC, and is not a bank. Base APY is representative, variable, and requires no minimum. Individual experiences and outcomes will differ. NerdWallet receives compensation from Wealthfront for referring clients through paid ads, which creates a conflict of interest; NerdWallet is not a client. Investing involves risks. Securities are not bank deposits, bank-guaranteed or FDIC-insured, and may lose value. Investment management and advisory services provided by Wealthfront Advisers LLC, an SEC-registered investment adviser.
Annual percentage yield (variable) is 3.25% as of 12/12/25, plus a 0.75% boost (“APY Boost”) on balances up to $1M for new clients with a qualifying deposit. $10 min deposit for base APY. Terms apply (betterment.com/boost); if the base APY changes, the Boosted APY will change. Cash Reserve offered by Betterment LLC and requires a Betterment Securities brokerage account. Betterment is not a bank. Learn More (https://www.betterment.com/cash-portfolio).
All Bread Savings APYs are accurate as of 05/21/2026. APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. To open a CD, a minimum of $1,500 is required and must be deposited in a single transaction. A penalty will be imposed for early withdrawals on CDs. At maturity, your CD will automatically renew and earn the base interest rate in effect at that time. Rates are compared against competitor rates published by NerdWallet.com and the institutions themselves as of 05/21/2026. NerdWallet.com obtains the data from the various banks that it tracks and its accuracy cannot be guaranteed.
Annual Percentage Yield (APY) is subject to change at any time without notice. Offer applies to personal non-IRA accounts only. Fees may reduce earnings. For CD accounts, a penalty may be imposed for early withdrawals. After maturity, if your CD rolls over, you will earn the offered rate of interest in effect at that time. Visit synchrony.com/banking for current rates, terms and account requirements. Member FDIC.
Annual Percentage Yield (APY). APY may change at any time and fees may reduce earnings. Please visit etrade.com/ratesheet for more information. The $15 monthly account fee can be waived when you maintain an average monthly balance of at least $5,000 in the account on or after the end of the second calendar month from opening the account.
You want to maximize savings. CDs tend to have the highest yields among bank accounts.
You want to lock in a rate. CDs pay set interest rates, so you can earn a predetermined yield during your term, even if overall interest rates fall.
You prefer to set aside a fixed amount of savings for a big purchase months or years away. A CD requires you to forgo any withdrawals or deposits until its term expires. This can be handy if you want a safe place to keep money designated for a big-ticket item such as a car or down payment.
You want a wider pool of high-yield options than MMAs tend to offer. High-yield savings accounts, particularly those offered by online banks, generally have above-average interest rates. They can be better than many MMA rates, and you can still keep your money within your reach. Check out the best high-yield online savings accounts.
You don’t want to worry about the higher minimum balance requirements that MMAs and CDs can have. Savings accounts tend to have the lowest opening and ongoing balance requirements among the three banking products. Many high-yield savings options don't have monthly fees, but some may still require a certain balance to earn a top rate.
Frequently Asked Questions
How do rates differ for CDs and money market accounts? How do rates differ for CDs and money market accounts?
CD rates are typically higher than money market account rates. (See the national average rates across deposit accounts.) Banks have an incentive to give you better rates for CDs because you promise to give up access to your money until the end of the CD term.
What’s the difference between a CD and a mutual fund? What’s the difference between a CD and a mutual fund?
CDs are time-sensitive savings accounts, while mutual funds are investment vehicles in which money gets invested in stocks, bonds or other assets. Learn more about mutual funds.
Which is safer: CDs or MMAs? Which is safer: CDs or MMAs?
Both CDs and MMAs are federally insured savings accounts, so they’re equally safe. Up to at least $250,000 gets insured in your name across your individually owned accounts at one bank or credit union. (Learn more about federal deposit insurance.)
Compare types of bank accounts
Your cash can go into many different bank accounts, and it’s helpful to know the pros and cons of account types. Check out these articles to help you choose the right account.
