Putting money into a savings account is a great way to build an emergency fund or save for future purchases.
You can also put your savings into low-risk investments that enable you to earn interest on your money while maintaining some liquidity –- in other words, flexible access to your cash. Common examples include Certificates of Deposit (CDs) and Money Market Deposit Accounts (MMDA).
Certificates of Deposit (CDs)
Certificates of Deposit (CDs) are a type of low-risk investment. With CDs, you agree that you won’t touch the money you deposit for a specific period of time (from a few days to a few years). Generally, the longer you keep your money in the account, the greater your rate of return.
Money Market Deposit Account (MMDA)
A Money Market Deposit Account (MMDA) is a low-risk investment. It’s a form of savings account that requires a larger balance than CDs or regular savings accounts. Compared to regular savings accounts, MMDAs offer a better interest rate and allow you more flexible access to the funds in your account.
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