Dr. Beverly Howell, Extension family economics and management specialist at Mississippi State University, said most people have not studied the options available so they rely on the familiar and convenient savings accounts. It's just a matter of who is and who isn't willing to listen. Some people are used to doing things a certain way, and there is nothing wrong with that. But their money could be doing more for them than simply sitting in a low-interest savings account. Money markets often limit monthly transactions and impose balance minimums, but earn about 3 percent interest.
CDs lock up the money until the specified term ends.
They offer a guaranteed rate of return, which often ranges from several months to several years. A five-year CD currently carries a 5 percent return rate. The longer the time period, the greater the return. For the consumer willing to take some risks, money market mutual funds have become quite popular for those looking for even bigger returns. Though not as risky as playing the stock market, mutual funds invest in a wide range of tools, including stocks, corporate bonds and U.S. Treasuries.