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Certificate of Deposit vs. Savings Account

Cake vs. pie, skiing vs. snowboarding, and dog vs. cat are just some classic choices we could debate for hours. Similarly, some finance choices can be pretty personal, like whether to save with a classic savings account or a certificate of deposit. So let’s play a game of this vs. that, personal finance edition. See the differences between traditional savings accounts and CDs, and decide which is right for you and your money.


Type of account 

Standard savings accounts are intended to be a place where you keep your money secure but where you don’t withdraw every day as you might with a checking account. CDs are also a type of personal savings account, though they have different benefits and restrictions than your standard member savings.  


Minimum balance 

Some savings accounts have a minimum balance, but many don’t. The same can be true of CDs. It just depends on the account. The Vault Certificate has a minimum deposit of $1, while the term certificate is a minimum of $1000. On the other hand, the membership savings account has a minimum balance of $20. It’s all up to the account’s terms. 


Person doing finances with a calculator

Number of withdrawals

For CDs, you agree to a maturity date when you open the account. That means you can only withdraw your money (without paying a penalty) after a certain date. That might be as little as 90 days or as many as 3 years or more. That longer time frame can be a powerful incentive for saving, but it might not be an ideal place to keep your emergency savings account.


The best age for saving

People of any age can save with either a personal savings account or a CD. Regarding classic savings at RMCU, the Rocky Super Saver account is geared toward anyone under 18, and the Youth Certificate has the same demographic. But there are plenty of account options for the 18+ crowd too. So people of any age can benefit from either type of account. 



Traditional savings accounts and CDs both incorporate top digital security through financial institutions like RMCU. And they both can let your money grow securely, free from the whims of the stock market. 


Woman with her phone and a credit card

Dividend rate 

Dividend rates are where CDs really stand out. Dividends, also sometimes known as interest rates, compound on the money you have deposited in your account, paying you more the longer you keep your money there. By having your money in the account for a guaranteed longer amount of time in your CD, you also benefit from a higher APR. 


A certificate account with RMCU that has a 12-month maturity date has an APY of 3.3%, compared to a regular savings account that might have an APY of 0.01%. A CD with a $10,000 starting balance at that rate would earn $335.04 over the course of the year versus a savings account with that balance and the lower APY that would only gain $1 in a year. So, opening a CD is an easy choice if your goal is to make your money grow over time.


And sometimes, you can score even better deals with promotional rates on CDs. The RMCU Certificate of Deposit special can boost your APY even higher. Check to see if you qualify, and get started with bigger savings. The great news is, there doesn’t need to be a choice in this version of this vs. that: you can still save with both types of accounts if that’s what suits you best. 

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