Such accounts are a good place to store your emergency funds. The chief drawback is that interest rates tend to be low. Money Market Deposit Accounts. These accounts usually earn slightly higher interest than a savings account but still allow easy access to your money.
CDs usually earn more interest than a savings account and are a very low risk financial vehicle.
You agree to keep your money on deposit for a fixed period of time. Usually, the longer the term, the higher the interest rate. There may be penalties for early withdrawal. You do defer paying income tax on the contributions you make. Income tax is due when the money is withdrawn.