In this section, we’ll explore two essential savings products: savings accounts and certificates of deposit (CDs). Savings accounts offer a secure place to park your funds while earning interest. They provide easy access to your money with the flexibility to deposit and withdraw at any time. Unlike checking accounts, savings accounts have fewer transaction options but are designed for longer-term savings with interest that adjusts with market rates.
On the other hand, certificates of deposit (CDs) are a fixed-term investment option where you deposit a lump sum of money for a set period at a fixed interest rate. CDs typically offer higher interest rates compared to savings accounts, but they come with the trade-off of limited access to your funds until the term expires. In this section, you’ll learn the key features, benefits, and limitations of both savings accounts and CDs to help you make informed decisions about your savings strategy.