Certificates of Deposit vs Savings Accounts

What are the advantages/disadvantages of CD's versus savings accounts?

@John, I wondered this, too! In my opinion, advantages include higher than average interest gained over a period of time—especially if you're used to just housing your money in a low APY checking account. (Which, let's be real, they're all pretty low right now)

The one big disadvantage in my opinion is that you'll most likely pay a fee to access your money in the event that you need it for an emergency.

Overall, the rates of CDs aren't that much higher nowadays compared to high-interest savings accounts. That's why I've opted to go with a multiple savings accounts for my lifestyle and financial situation.

Here's a great Bankrate article that I referred to when making this same decision for myself: https://www.bankrate.com/banking/cds/the-pros-and-cons-of-cd-investing/

Liquidity is usually the big one, CDs tie up your money for a set amount of time savings is always available. I just opened a money market account which is legit just a higher interest savings account. Some banks/credit unions have more services that have even more options or higher interest payouts.

Interesting

They try to scare you when they say substantial penalty for early withdrawal. The place where I read the fine print, the penalty was 90 days of interest.

The penalty for early withdrawal is the big negative to CDs. That amount may vary from 30 days of interest up to 365 days, depending on the term of your CD.

If you are patient enough to build a CD ladder, this strategy helps to build liquidity into your higher-interest CDs. Essentially, you would sock away $500 (for example) every month or two in a CD and start working toward longer terms so that you eventually have multiple (higher rate) CDs, with one more maturing every month or two, thus freeing up your funds more regularly, penalty free.

How do I get started