Most money after tax, fees and penalty risk
Savings accountEven money you will not need soon does better in the savings account here. The CD does not pay enough more to be worth locking the cash.
SwitchWize decision guide
Savings Account vs Money Market Account vs CD: Which Fits Your Cash?
All three are bank deposit accounts. They differ in how easily you can reach the money and what you give up to earn more. Match the account to when you will need the cash.
What you can expect
- No login required
- No credit pull
- Assumptions shown
- Sources included
Quick answer
Use savings or a money market account for money you may need soon. Use a CD only for money you will not need before it ends.
Put money you may need soon in a savings or money market account. Put money you will not touch until a set date in a CD. A money market account at a bank is insured like savings. It is not a money market fund. A CD often pays more, but taking money out early costs a penalty.
See current savings ratesIf savings account
Best for an emergency fund or any cash you might need soon. You can take money out without a CD penalty.
If money market account
Works like savings. It can suit larger balances, and some come with checks or a debit card. Ask the bank.
If cd
Best for money with a firm date. It often pays more, but taking money out early usually costs a penalty.
Key number to watch
The CD does not earn more than a bank account here, even with no chance of a penalty.
Test your situation
See your result in dollars
Change any number below to match your situation. No login is required. Saved decisions stay on this device, and signed-in users can revisit them across devices.
$
The money you are deciding where to put.
months
How long until you expect to spend it. Be honest about the date.
%
Your best guess that a surprise forces you to use the money sooner. Use 0% only for money with a firm date.
%
APY is the interest you earn in a year, counting interest on interest. The page starts at a tracked rate. Replace it with the rate at your bank.
%
The page starts at a tracked rate. Replace it with the rate at your bank. This is a bank account, not a money market fund.
%
Use the rate of a CD with the term you pick below. The page starts at a tracked rate. Replace it with the rate you are offered.
How long the CD locks your money.
Your answer so far
Even money you will not need soon does better in the savings account here. The CD does not pay enough more to be worth locking the cash.
See the full breakdownEven money you will not need soon does better in the savings account here. The CD does not pay enough more to be worth locking the cash.
Savings account
$319
interest after tax, minus fees
Money market account
$312
interest after tax, minus fees
CD
$305
interest after tax, minus expected penalty
Try a scenario
What could change this
The CD does not earn more than a bank account here, even with no chance of a penalty.
How certain: scenario dependent
The CD you chose lasts 12 months. Match it to the date you will really need the money.
How certain: high
Check these assumptions
- • Rates, fees and minimums can change. Check each account’s current terms before you move money.
- • The chance of needing the cash is a test you enter, not a prediction. Real life is all or nothing: you pay the penalty or you do not.
- • Deposit insurance covers up to $250,000 per depositor, per insured bank, per ownership category. Check the limit before you put a large balance in one bank.
What matters most
Easiest access to your cash
dependsSavings and money market accounts both let you take money out without a CD penalty. Banks set their own rules on transfers and checks, so ask yours.
A rate that is usually set for a fixed time
CDA CD rate is usually set for the whole term. Savings and money market rates can change. Your penalty here is 3 months of interest.
Side-by-side comparison
What it is for
- Savings account
- Emergency fund and goals you may reach soon
- Money market account
- Larger balances you want to keep within reach
- CD
- Money with a firm date
Taking money out
- Savings account
- No CD penalty. Your bank may set its own limits
- Money market account
- No CD penalty. Your bank may set its own limits
- CD
- Usually a penalty before the end date
Checks or debit card
- Savings account
- Ask the bank
- Money market account
- Some accounts offer them
- CD
- Never
Minimum balance
- Savings account
- Often low or none
- Money market account
- Often higher than savings
- CD
- Set when you open it
Does the rate change?
- Savings account
- Yes, the bank can change it
- Money market account
- Yes, the bank can change it
- CD
- Usually set for the whole term
Deposit insurance
This is about bank accounts. A money market fund is an investment and is not covered.
- Savings account
- Up to $250,000 at each insured bank
- Money market account
- Up to $250,000 at each insured bank
- CD
- Up to $250,000 at each insured bank
What could go wrong
Savings account
- What needs to work
- The bank keeps paying a competitive rate.
- Common problem
- The rate drops and you do not notice.
- What it could cost
- Interest you never earn, year after year.
- How to prepare
- Easy. Move the money to another bank any time.
Money market account
- What needs to work
- You can keep the minimum balance and avoid fees.
- Common problem
- The balance falls below the minimum and a fee starts.
- What it could cost
- A monthly fee that cancels the extra interest.
- How to prepare
- Easy. Move the money to another bank any time.
Certificate of deposit (CD)
- What needs to work
- The money stays untouched until the CD ends.
- Common problem
- A surprise bill forces you to break the CD.
- What it could cost
- The penalty, which can take some or all of the interest.
- How to prepare
- Hard before the end date. The CD terms set the cost.
A simple backup plan
Give each part of your cash a job
You do not need to pick only one. Put near-term money where you can reach it. Lock only what you are sure you will not need.
- 1Keep your emergency fund in savings or a money market account.
- 2Choose a CD term that ends on the date you will need the money.
- 3Check the fees and the minimum balance on each account.
- 4Look at your rates again every few months.
Educational illustration only. The right amount depends on your needs and timing.
What to do next
Question 1
Could you need this money in the next year?
Yes: Use savings or a money market account.
No: Go to the next question.
Question 2
Do you need checks or a debit card for this money?
Yes: Ask about a money market account. A CD will not work.
No: Go to the next question.
Question 3
Does a CD ending on your date pay enough more after tax?
Yes: A CD can be worth the lock.
No: Stay with savings or a money market account.
Plain-text decision tree. Could you need this money in the next year? If yes, Use savings or a money market account. If no, Go to the next question. Do you need checks or a debit card for this money? If yes, Ask about a money market account. A CD will not work. If no, Go to the next question. Does a CD ending on your date pay enough more after tax? If yes, A CD can be worth the lock. If no, Stay with savings or a money market account.
When to check again
- Your rates change by 0.5 percentage point or more.
- The date you need the money moves closer.
- A fee or minimum balance changes.
- Your CD is about to end.
- Your tax rate changes.
Methodology
The calculator works out interest for each account over the months you enter. It takes off tax and subtracts any monthly fees. For the CD it also subtracts the expected cost of a penalty. The expected penalty is the chance you need the money times the full penalty. If you need the money before the CD ends, the penalty counts as certain.
The page starts each rate at a rate SwitchWize tracks. These are not offers from your bank, and the page does not call them live rates for your account. Replace them with your own numbers. Every other value is a plain default you can change.
- • The chance of needing the cash is a test you enter. It is not a forecast.
- • The penalty uses the months of interest you enter. Your CD terms set the real penalty.
- • It assumes savings and money market rates stay steady.
- • It does not model tiered money market rates or promotional rates.
Starting rates refresh with the SwitchWize rate system. Sources and assumptions are reviewed every quarter. Editorial conclusions do not depend on affiliate availability.
Sources
FDIC: Deposit insuranceChecked October 20, 2026 · high confidence
Covers savings, money market deposit accounts and CDs up to at least $250,000 per insured bank. Mutual funds are not covered.
FDIC: Deposit accountsChecked October 20, 2026 · high confidence
Describes CD penalties and how money market accounts differ from CDs.
Federal Reserve: Savings deposits FAQChecked October 20, 2026 · high confidence
Banks may suspend the six-transfer limit and are not required to.
IRS Topic No. 403: Interest receivedChecked October 20, 2026 · high confidence
SwitchWize tracked savings, money market and CD ratesChecked October 20, 2026 · moderate confidence
Starting values only. Enter the rates you would really earn.
Frequently asked questions
What is the difference between a savings account, a money market account and a CD?
All three are bank deposits. Savings and money market accounts let you take money out when you need it. A CD locks your money for a set time. Money market accounts usually need a higher minimum balance.
Is a money market account the same as a money market fund?
No. A money market account is a bank deposit. A money market fund is an investment, and the FDIC does not insure mutual funds. See the money market fund comparison if you are weighing a fund.
Is my money safe in a money market account?
The FDIC insures money market deposit accounts, savings accounts and CDs up to at least $250,000 at each FDIC-insured bank. Check that your bank is insured before you open an account.
Is there still a limit of six withdrawals a month on savings?
The Federal Reserve removed its six-a-month federal limit in 2020 and says it has no plans to bring it back. Banks do not have to drop their own limits or fees, so check your account terms.
What happens if I take money out of a CD early?
The FDIC says you will likely have to pay a penalty or lose some or all of the interest you earned. Read the penalty in the CD terms before you open one.
Does a money market account pay more than savings?
The FDIC says money market accounts usually pay a higher rate and need a higher minimum balance than some other options. Compare the actual rates and minimums at the banks you are considering.
Which account is best for an emergency fund?
A savings or money market account, because you can reach the money without a penalty. A CD is a poor fit for money you might need on short notice.
Do I pay tax on the interest?
Yes. The IRS says most interest you can withdraw without penalty is taxable income in the year it becomes available to you. Enter your tax rate in the calculator to see what you keep.