Confound it! Banks are always trying to blow people’s minds by throwing out all kinds of banking jibber jabber at you. It’s a damned cesspit of financial jargon, and you’re not doing the backstroke. You’re doing the get-a-pole-because-I’m-drowning. No one knows what these banking people are saying, and no one wants to ask because that would mean admitting you don’t know.  Remember your personal finance guide can help!

Let’s not only drain the pit, but turn it into a veritable oasis, complete with drink umbrellas and everything. Before we dive into the nitty-gritty, let’s get a basic idea of the service and products that we’re going to talk about. We’ve got checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs).

Checking and savings accounts are usually the basics of banking. They work together like an ice skating duo. You can have one skater, and that’s fine. Just like you can have one account, checking or savings, and that’s fine. However, for a better act, Fabio flipping Miss Stringbean in the air is just more impressive. Saving and checking work separately but at the same time, as one.

Savings is the muscle. It holds most of your money and allows you to constantly be putting money aside. It’s there in case of an emergency. Savings is our Fabio. Without him there to catch you when you fall, you break your face on the ice.

Checking does most of the smaller stuff, but lots of it! It is there for your everyday needs. It supports you on the day to day basis and gives you easy access to your money. There is no show without checking. She’s the one doing the flips! Now on the flip side, maybe you want to pay everything in cash, in which case, I guess Fabio could look okay skating by himself.

Savings and checking are so closely related that some banks link these two accounts, that way if you take out more money than you have in your checking, they just take it out of your savings.

Money market accounts and certificates of deposit (CDs) are more for people that are trying to make money off of their money. They typically have higher interest than checking and savings accounts. You put money in these accounts to get guaranteed returns. You will get paid the interest they offer you no matter what, unless you take your money out early in the case of CDs. Money market accounts are easily accessible. Certificates of deposit are locked in for a certain amount of time, but you generally get a higher interest rate. I suppose it’s like the costumes and the music in the ice skating show. They aren’t necessary, but they make everything seem better.