Banking · Module 3 of 5
Where the money sits
Checking, savings, fixed-term deposits and more: what each account pays, how easy it is to reach, and when switching is worth it.
Key terms in Where the money sits
- Checking account
A checking account is a deposit account at a bank, or a share draft account at a credit union, built for frequent use. It allows deposits, bill payments and withdrawals, usually through checks, debit cards and electronic transfers. It is typically designed for everyday transactions rather than for earning interest.
Source: Consumer Financial Protection Bureau, Financial Terms Glossary
- Savings account
A savings account is a deposit account at a bank, or a share savings account at a credit union, used to set money aside and earn interest on it. Access is generally more limited than with a checking account. Accounts at insured institutions are covered by federal deposit insurance up to a limit.
Source: Consumer Financial Protection Bureau, Financial Terms Glossary
- Certificate of deposit (CD)
A certificate of deposit is a savings product offered by banks and credit unions in which money stays on deposit for a stated term. It usually pays a higher rate than a regular savings account in return for that commitment. Taking funds out before maturity typically triggers a fee, which varies by institution.
Source: Federal Deposit Insurance Corporation, Shopping for a Certificate of Deposit?
- Money market deposit account
A money market deposit account is a federally insured account at a bank or credit union that generally pays more than an ordinary savings account. Institutions may require a minimum balance to open it or to earn the stated rate. It should not be confused with a money market fund, which is an investment product.
Source: Consumer Financial Protection Bureau, Financial Terms Glossary
Every term on Lever is in the money glossary.
About this module
Where the money sits is part of Banking, one of 15 subjects in Lever. It’s a short run of 8 lessons, about 20 minutes in all, so you can finish it in one sitting.
Every lesson takes one idea at a time. You read it with the math worked out step by step, answer a question that puts it to use, then see why the right answer is right and why the others aren’t.
It’s for anyone who was never taught this, and you don’t need to know anything first. Every lesson is free. Lever works out what you already know, so you can start here or let your path bring you to it.
More in Banking
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1
Lending to people you know
Lending to friends and family, cosigning a loan, and what it can really cost you.
6 lessons -
2
What a bank actually does
What a bank does with your money, how it makes a living, and how to choose between a bank, a credit union and an online bank.
5 lessons -
4
What borrowing costs
What a loan is made of, what the yearly rate means, and why paying only the minimum costs so much.
5 lessons -
5
Moving money in and out
Getting paid, using ATMs, overdrafts, and the real difference between debit and credit cards.
7 lessons
Try this module
It’s part of Banking. Lever will bring it to you when you’re ready, or you can go straight there.