Did you know you can earn money when you save money, without any risk? When you use a savings account, you earn interest on your money. Interest is the money your bank or credit union gives you for letting them manage your account.

Savings, certificate of deposit (CD), and money market accounts are usually insured by the federal government, which is why they are very safe ways to save money.

Savings Account

When you open a basic savings account, you can earn interest. You usually get a very low interest rate, which will grow your savings, but not much. The benefit of a basic savings account is the flexibility – you can deposit and withdraw money whenever you want.

Using a savings account gets you started. You should also consider other ways to build wealth over a long period of time. There are other types of savings accounts that can earn more interest on your money.

Money Market Account

Money Market accounts are similar to savings accounts, but they usually have a higher interest rate. This rate can go up or down. Some money market accounts require a minimum investment, but this can be as low as $100. You can get your money anytime you want, without having to pay a penalty. Ask your bank or credit union if the federal government insures their Money Market Accounts. You should also ask how many withdrawals you are allowed to make each month.

Certificate of Deposit (CD) Account

With CDs you deposit money for a set period of time. For example, you could deposit your money in a 6-month, 12-month, or 24-month CD. The interest rate is higher than a basic savings account, and it won’t change after you invest. You have less flexibility with a CD – if you take your money out early you’ll have to pay some of it back as a penalty. You can get a CD Account at your bank or credit union.