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

By: American Heritage06.13.24
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. Despite the low average rates for savings accounts, you don't need to resort to risky investments to make the most of your money.

A certificate or money market account (MMA) from a credit union can be a smart and safe way to reach your savings goals sooner. Unlike stocks, both account options have federal insurance and often pay much higher dividends than a typical savings account. Certificates and MMAs are both good options, but they have some key differences 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 you look at money market accounts versus savings accounts, you'll notice they are alike but differ in a couple ways. MMAs tend to pay higher dividends and require a higher minimum balance to earn the advertised interest rate. Learn how you can make the most of your money with a high-yield savings account.


Key Advantage:

If you have a few thousand dollars saved, you can make the most of your money while still having quick access to cash or electronic transfers. But, it’s important not to treat this as a checking account; MMAs are typically limited to six withdrawals or fewer per month.

American Heritage offers multiple Money Market account options, allowing members to move to a higher-rate account as their balance increases.



Build your savings with certificates. 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). When you lock in your funds for a longer term, you can earn higher rates that are usually fixed for the length of the certificate. 

Some financial institutions offer certificates with more flexibility, such as American Heritage’s Bump-Up Certificate. This 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 essentials. 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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