Deposited Money

• A savings account and a certificate of deposit are instruments used for saving money. Both are options for a person looking to deposit money into a bank. A savings account and a CD are available for either a single ownership or a joint account. Banks offer both services for people looking for a safe place to invest their money.
  
  

Interest

• Savings accounts and CDs both pay the owner interest. Interest is calculated and paid based on the amount of time the money is deposited at the bank. Interest on a savings account is generally slightly lower than that of a CD because with a CD, the money is invested for a certain period of time and cannot be withdrawn, without paying a penalty, until the specific time period ends. Deposits made to a savings account can be withdrawn at any time with no penalties.
  
  

FDIC Insured

• Both CDs and savings accounts are federally insured through the Federal Deposit Insurance Corporation (FDIC). The FDIC covers all depositors' insurance protection for their deposited funds. In the case of a bank failure, this protection provides all depositors' coverage for their funds of up to $250,000 per depositor. This provides for a safe investment whether a person chooses to invest in a savings account or a CD.
  
  

Minimum Deposits

• Savings accounts and CDs are similar in the aspect that generally each requires a minimum deposit. Savings accounts minimum deposit rules vary by institution, but normally they require a certain minimum balance to avoid fees. CDs always require a minimum deposit. CDs are purchased for a certain amount and therefore must have a certain balance.
  
  

Fees

• There are fees associated with both savings plans. The fees, however, are avoidable. Savings accounts have fees when deposits fall below the minimum balance allowed. CDs have fees if they are prematurely withdrawn.