CDs vs. money market accounts: What savers should consider this March
Recent economic news may have savers once again reconsidering their options. After February saw noticeable improvements in both inflation and unemployment, March has seen some changes that could have savers concerned anew. Stock market returns have been uneven and more unpredictable than usual, and on Friday, a new unemployment report not only showed a job loss in February, but also revised downward drops in the two months prior, too. Against this backdrop, savers may understandably be exploring ways to both protect their principal and, ideally, grow their interest right now.
Two such options to strongly consider are certificates of deposit (CDs) and money market accounts. Both come with competitive rates right now, offering savers a viable way to grow their money at a time when interest rates on traditional savings accounts aren't even breaking 1%. At the same time, these accounts have unique differences that need to be understood, especially this March. Below, we'll break down three specific items savers should consider to best determine which one makes the better home for their money this month (and in the months that follow).
Start by seeing how much interest you could be earning with a top CD account here.
CDs vs. money market accounts: What savers should consider this March
Don't open a CD or money market account this month before first taking the time to consider these three items:
A fixed rate vs. a variable one
CD interest rates top out around 4% right now, as do money market account rates. So either will work, right? Not necessarily.
CDs have fixed interest rates that won't change throughout the account's term, while money market accounts have variable rates subject to change based on market conditions. And, in today's climate, with interest rates expected to continually but gradually cool further, that means that the money market account rate you secure that's identical to a CD rate this March could look materially different by the summer, all while the CD continues earning that higher rate.
Compare your CD and money market account options online today.
The ability to keep the funds frozen
At the same time, you will have to keep your money in the CD until it fully matures to access that interest, so it won't be totally pain-free, either. And that could be a problem if you have no or insufficient emergency savings right now. An early withdrawal penalty on a CD is almost impossible to avoid, and it could equate to a loss of all or most of the interest earned on the account to that point.
These are issues that money market account holders don't need to contend with as they will maintain access to their funds to add to, withdraw from and even write checks against. At the same time, if the CD account ultimately means a bigger return when the maturity date hits your calendar, it could be a sacrifice worth making.
The timing of a CD account
CD accounts have been favorable savings tools for much of the last three years, in stark contrast to the little value they offered savers in the ultra-low interest rate climate of 2020 and 2021. At the same time, rates here have been gradually declining (there are scarce ways to earn 6% with a CD now, for example), and they could drop further if the Federal Reserve reduces rates later in 2026 or if other economic conditions encourage banks to reduce their rates to savers. So your timing here matters, especially with a CD account, which allows you to lock in long-term protection with one of today's higher rates in a way that a money market fundamentally cannot.
The bottom line
Both CDs and money market accounts have considerable pros and cons to consider at all times, but especially so in the unique economic terrain of March 2026. By contemplating these three items right now, savers can better determine which of the two accounts fits their needs and goals better. And, for some, the answer may be to simply split their money between both types, allowing them to earn a high rate of return while still maintaining a baseline of access as needed.
