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Certificates vs. Money Market Accounts: What’s Right for You?

By: American Heritage03.21.19
Certificate vs. MMA

Whether you’re saving toward retirement or the down payment on a car, you want to know your hard-earned cash is steadily growing. While the average rate for bank savings accounts is very low, that doesn’t mean you have to pour your savings into risky investments to make the most of your funds.  

A certificate or money market account (MMA) from your local credit union can be a smart, safe way to grow your money faster – and reach your savings goals sooner. Unlike stocks, both account options are federally insured, and they often pay much higher dividends than typical savings accounts. Certificates and MMAs are both good options, but they have some key difference you should know about when deciding which to choose. 



MMAs are a great way to earn a higher rate on larger balances while having easy access to your money market funds. When comparing money market vs. savings account features, you’ll find the accounts are quite similar, but with a couple important differences: MMAs tend to pay higher dividends and require a higher minimum balance to earn the advertised rate (or avoid a service charge).

Key Advantage:

If you have thousands of dollars saved already, you can make the most of your funds while still having immediate access to cash via check or electronic transfer. But, it’s important not to treat this as a checking account; MMAs are typically limited to six withdrawals or fewer per month.

Here at American Heritage, we offer several Money Market account options that give members the opportunity to upgrade to an account with a higher rate as their balance grows.



A certificate is the credit union equivalent of a bank’s certificate of deposit (CD). This option lets you hold your funds in an account for a predetermined length of time. Your funds and dividends become available when the account matures at the end of its term. Terms range from short (such as three months) to long (such as five years or more). You can earn higher rates by locking in your funds for a longer term, and the rate is usually fixed for the entire period.

Some financial institutions also offer certificates with more flexibility, such as American Heritage’s Bump-Up Certificate, which gives you the option to adjust your rate one time during your term to take advantage of rising rates.  

Key Advantage:

Certificates with longer terms usually pay more than MMAs. Plus, most require a lower opening deposit, making it easier to access a great rate with less money. If you want to protect your nest egg from the stock market’s ups and downs, this can be a great way to do so. However, you’ll need to keep your funds in the certificate until maturity to take advantage of their rates. These accounts charge a penalty for early withdrawal.



A money market account provides easy access to your funds but usually requires a higher balance. A certificate may offer an even better rate but will keep your funds out of reach for a period of time. So which should you choose?

When considering a money market vs. CD or certificate, it’s important to look at your specific goals, lifestyle, and financial situation. One of these scenarios might be similar to yours:

Situation A: You’re in Your 20s and Saving for a Down Payment on a Home.   

Chances are, you’re still early in the process of saving. You want to earn a higher rate but need your money available for emergencies. A money market account could be a good option if you’re able to maintain the necessary balance. If not, consider keeping some funds in a regular savings account and investing the funds earmarked for your future home in a certificate.

Situation B: You’re a Parent with Your Own Home.

Your kids need new school clothes. Your house needs a new water heater. As a parent and homeowner, having quick access to your cash is essential. If you’ve built up substantial savings by this time, a money market account can give you the flexibility and earnings you want.

Situation C: You’re Getting Close to Retirement.

You’ve been saving and investing for years. When you’re nearing retirement age, you don’t want to subject your savings to the whims of the stock market. Certificates (or IRA certificates) can be a great way to protect and grow your funds to support a comfortable retirement.  

And remember, if you have enough funds and want both flexibility and growth, you can also split your savings between an MMA and certificate (or use a certificate laddering strategy) 

At American Heritage, we support savers at every stage of life by offering a full array of certificates and money market accounts. Check out our rates to see how much you could earn, and connect with our knowledgeable team to discuss which options are best for you.



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