When deciding between a regular savings account and a standard CD, or certificate of deposit, there are some major things to keep in mind. If you want higher rates, then certificates of deposit are the way to go. If you want access to your money more frequently, then a savings account is the best route for you.
If you prefer to withdraw funds without any penalty, but still want above average rates, then a no-penalty CD is the way to go. They offer a fixed rate, unlike standard CDs, and give you the option to make one free withdrawal. Continue reading to learn the benefits about each type of account.
American Express Personal Savings Account - You earn 1.00% interest rate along with no minimum deposits or monthly fees. Amex Personal Savings has been my favorite Hub account for the past 5 years. Using this account to Pull/Push your money is absolutely necessary when you have many accounts. Here's why:
*No dollar limitations for ACH transfers - When you find a top bank rate account, you don't want to be limited to just $5K or $10K transfers. Amex Savings will let you transfers as much as you want whether you are pulling or pushing money from and to an external bank account.
*1 to 2 business days ACH transfers speed - With top-notch user interface, you get your money to another external account or pull money from another bank account within a day or two.
*No loss of interest during transfers - On the day you initiate your transaction on the Personal Savings website, the funds will be reflected in your Current Balance and begin earning interest.
Some other features from American Express Personal Savings include Free Wire Transfers, 3 maximum linked accounts, and maximum 6 ACH withdrawals per month.
Savings account offers are frequently updated. Find the best nationwide Savings/Money Market rates here, and the best Savings account bonuses here. The Axos Bank and CIT Bank accounts offer great rates available nationwide which I recommend.
|Chase SavingsSM||$150 Cash||Review|
|American Express High Yield Savings||1.00% APY||Review|
|Axos Bank Money Market Plus||0.90% APY||Review|
|Axos Bank High Yield Savings||0.90% APY||Review|
|CIT Bank Money Market||0.85% APY||Review|
|Discover Bank Online Savings||0.80% APY||Review|
|CIT Bank Savings Builder||0.75% APY||Review|
Table of Contents
A no-penalty CD is still a CD but one of its major upsides is that it comes with fixed rate and term length. This means you are guaranteed that rate for the duration of the certificate’s term length. A big difference between this type of CD and a traditional one is that you can withdraw the cash once without losing any money.
A standard CD locks the money that you initially deposit into the account for a specified term in exchange for a fixed rate that is normally much higher than a savings account. If you were to withdraw money from this type of CD, you will be charged a penalty fee for withdrawing money earlier than the term length.
A savings account earns interest and lets you add and withdraw money over a period of time. However, you must keep in mind that there are limits to how frequent you withdraw money. Also, savings rates are not fixed and can change at any time.
When To Choose a No Penalty CD
If you want a fixed rate. Like other CDs, a no-penalty CD will have fixed rates that can benefit you if banks were to change their annual percentage yields (APYs) on savings accounts.
If you want more options over a standard CD. No-penalty CDs allow you to withdraw all of your money at any time during the term length. The catch is, once you do take all of your money out, the account closes. You must also take all of it out at once.
With the CIT Bank No-Penalty 11-Month CD:
• Earn 0.75% APY on your funds with just a $1,000 minimum deposit.
• The perfect balance between a great fixed rate and flexible money access.
• Access funds, if needed. No penalty.
• No opening or maintenance fees
• Shorter 11-month timeframe and a great APY
• If you need your funds prior to the maturity date, you can withdraw your money — including any interest earned — beginning seven days after the funds have been received. No penalty. No problem. It's the security of a CD with the flexibility to access your funds early if you need them.
When To Choose a Savings Account
You plan on building your savings up slowly. An important part in saving, is adding money to an account over time. This is what a savings account is built for. You don’t have this option if you choose to go for a CD.
You want the flexibility to make withdrawals. You don’t need to plan when you’ll need money in the future since savings accounts let you withdraw up to six times per month.
Compare Savings Accounts
Open a Discover Online Savings Account for all these features:
• Earn high interest rate of 0.80% APY
• No minimum opening deposit, no minimum balance requirement, and now no fees
• Interest on Discover Online Savings Accounts is compounded daily and credited monthly
• Manage your account online or with the Discover mobile app
• FDIC insurance up to $250,000
See advertiser website for full details
With the CIT Bank Savings Builders account:
• Earn a top tier, competitive APY on your money—one of the top savings rates in the nation. Earn 0.75% APY on your funds - grow your savings faster.
• Build a habit of savings. Pay yourself first. Start with $100 per month and build your habit of savings-—all while getting a top rate.
• FDIC Insured
• Enjoy a $150 bonus when you open a new Chase SavingsSM account, deposit a total of $10,000 or more in new money within 20 business days, and maintain a $10,000 balance for 90 days
• Access to 16,000 Chase ATMs and nearly 4,900 branches
• Link this account to your Chase checking account for Overdraft Protection.
• Chase Mobile® app – Manage your accounts, deposit checks, transfer money and more — all from your device.
• Open your account online now.
• Available online nationwide except in Alaska, Hawaii and Puerto Rico. For branch locations, visit locator.chase.com.
With the American Express® Personal Savings Account:
• Earn 1.00% APY on your deposits. Your Personal Savings account earns interest daily and is posted to your account monthly.
• Links easily with your current bank accounts. No need to switch banks.
• FDIC Insured. Your account is insured to at least $250,000 per depositor.
• No monthly fees, no minimum balance.
• 24/7 Account Access
Bank, budget, and save with up to 1.00% APY. Simple’s Protected Goals Account is designed to help you save in a separate high-yield checking account.
• Earn 1.00% APY on balances $10,000 and above
• Earn 1.00% APY on balances $9,999 or less
Choosing the right financial product for you doesn’t have to be hard. Especially if you consider the things we have listed above.
A no-penalty CD is a great choice if you want higher rates but think you’ll need the money soon. If you’re not worried about needing a certain amount of money immediately, then go for a traditional CD.