We have discussed the importance of saving. In this section we will discuss some saving account vehicles.
In the world of Savings Accounts there are three primary vehicles: Standard Savings Accounts, Certificate of Deposits and Money Market Accounts.
Standard Savings Accounts
Standard Savings Accounts often allow you to withdraw your money whenever you want without penalties. Though the interest rate is low (rarely above three percent) it is less risky and steadily grows.
Certificates of deposit (CDs)
CD's typically pay a higher interest rate than regular savings accounts. However, you have less flexibility to withdraw whenever you want to. If you withdraw too soon you could be penalized and lose some or all of the interest earned.
Money market accounts (MMAs)
MMAs also pay a higher interest rate than regular savings accounts. Unlike CD's however, you are usually allowed to write a limited number of checks or even make a transfer during each month assuming you do not go below your required mandatory minimum balance. If you do go below your minimum you could be assessed fees and lose any interest earned or both.