Money Market Account and CD's Defined
In tough times like these, it is best to save your money and put it in the bank. By saving your money, you are able to prevent yourself from spending too much. Another advantage of saving money is that you may be able to earn a passive income on it.
This is possible through the interest you earn from the money you have deposited. If you are serious about saving money and want to earn an ongoing passive income through bank deposits, you should think about several things first. The first thing that you should do is understand the different rates that are available and the terms that go along with those rates.
A money market account is an account that yields interest and also allows the depositer to withdraw funds with short notice or no notice at all. Every bank that offers an account of this type has its own rates and terms and conditions. It is advisable to choose the money market rate that does not only offer high interest rates but also has reasonable terms and conditions that are suitable to your needs and prevailing circumstances.
A CD, on the other hand, is a deposit that yields a higher interest rates compared to a money market account. In return for the higher rate, there are more restrictions in the time and frequency of withdrawing the funds deposited. This is why a CD is also known as a time deposit. The philosophy behind a certificate of deposit is that the depositor earns a higher yield as compared to other interest rates because the depositor is prevented from withdrawing the funds that he or she deposited within the agreed duration of time.
Basically, the two factors that you have to consider in choosing a money market or a certificate of deposit are the money market rates or the certificate of deposit rates and the terms and conditions imposed. A high interest rate does not necessarily mean that it is the best deal. Usually, high interest rates are accompanied by stricter conditions. Hence, study and analyze the terms and conditions imposed if they are suitable to your current situation. - 23222
This is possible through the interest you earn from the money you have deposited. If you are serious about saving money and want to earn an ongoing passive income through bank deposits, you should think about several things first. The first thing that you should do is understand the different rates that are available and the terms that go along with those rates.
A money market account is an account that yields interest and also allows the depositer to withdraw funds with short notice or no notice at all. Every bank that offers an account of this type has its own rates and terms and conditions. It is advisable to choose the money market rate that does not only offer high interest rates but also has reasonable terms and conditions that are suitable to your needs and prevailing circumstances.
A CD, on the other hand, is a deposit that yields a higher interest rates compared to a money market account. In return for the higher rate, there are more restrictions in the time and frequency of withdrawing the funds deposited. This is why a CD is also known as a time deposit. The philosophy behind a certificate of deposit is that the depositor earns a higher yield as compared to other interest rates because the depositor is prevented from withdrawing the funds that he or she deposited within the agreed duration of time.
Basically, the two factors that you have to consider in choosing a money market or a certificate of deposit are the money market rates or the certificate of deposit rates and the terms and conditions imposed. A high interest rate does not necessarily mean that it is the best deal. Usually, high interest rates are accompanied by stricter conditions. Hence, study and analyze the terms and conditions imposed if they are suitable to your current situation. - 23222
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posted by X - Men @ 1:44 AM
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