What account typically offers the highest interest rate?

A certificate of deposit (CD) typically offers the highest interest rate among the options listed. This is because CDs are designed to lock in funds for a specific term, ranging from a few months to several years. During this period, the money cannot be easily withdrawn without incurring penalties. As a result, banks and financial institutions are willing to offer higher interest rates on CDs to incentivize customers to keep their money deposited for longer periods.

The other account types generally provide lower interest rates. Checking accounts are intended for daily transactions and usually have minimal interest. Savings accounts offer better rates than checking accounts but still fall short of the rates provided by CDs. Money market deposit accounts tend to have competitive rates, often higher than traditional savings accounts, but they still do not typically reach the interest rates available through CDs, which capitalize on the longer commitment of funds.