To put away money and earn interest, your best bet is to open a money market account or CD, since they pay higher rates. In contrast, the average MMA yields less than slightly below 3 percent, while long-term CDs net between 5 percent and 6 percent. You can deposit your money in an MMA if you want it to get at your savings quickly and without penalty. It has terms as short as seven days and as long as 10 years. Most accounts at banks are insured by the Federal Deposit Insurance Corporation.
Most bank accounts provide the same services, so it pays to shop around for the best interest rate.
You can compare the institutions in your town, or shop nationwide. Newsletters report the highest FDIC-insured yields on CDs and MMAs each week. Banks are among the safest places to keep your money, but they are also where you're likely to receive the lowest earnings. As with all investments, there's a tradeoff between risk and return. Stocks generally rise faster in price than the speed with which interest compounds in CDs, so you can get more for your money on Wall Street.