Education Center

Do You Need a Certificate of Deposit or Executive Savings Account?

Marc Soellner

When considering a savings account, you’ve probably heard of a “certificate of deposit” and/or an “executive savings account.” However, not everyone knows what these are or which they should choose. Today, we’ll dive into these two savings options to help you understand what they are and which benefits you the most.

Certificate of Deposit (CD)

A certificate of deposit (CD) is a savings account that earns interest on a lump sum or fixed amount over a determined period. CDs differ from savings accounts in that you cannot withdraw the money for the entirety of a fixed period. Premature withdrawals can result in penalty fees or lost interest. CDs usually have higher interest rates than other savings accounts as an incentive to not withdraw money.

Executive Savings Account

On the other hand, an executive savings account is a regular savings account with a higher interest rate. As a high-interest liquid account, an executive savings account lets you deposit and withdraw money without penalty. The interest rate is not fixed and can go up or down depending on inflation, competition between other banks, or changes to the Federal Reserve’s benchmark interest rate.

Benefits of a CD Account:

Since CD accounts have strict penalties for early withdrawals, they are perfect motivators for people who are serious about saving. CD accounts also allow you to earn additional money (interest) to “reward” you for leaving the account untouched.

Benefits of an Executive Savings Account:

If you want an account that lets you save or withdraw money as needed, then an executive savings account is best for you. You can earn high interest without the high penalties.

We understand that this is a lot of information, so here are the key differences:

Certificate of Deposit

  • Savings account that remains untouched for a fixed period
  • Penalties for early withdrawal
  • Earns interest over time
  • Great for sticking to a strict budget

Executive Savings Account

  • High-interest savings account
  • No penalty for withdrawals
  • Great for those who want to save and withdraw as needed

It’s never a bad time to start learning about your savings account options! Guardian Savings bank offers highly competitive savings rates for CDs and executive savings accounts. Start paying yourself first today; call or visit your local Guardian Savings branch to find our current savings rates!

Written by Marc Soellner

Marc Soellner is Vice President – Branch Coordinator of Guardian Savings Bank. In his spare time, Marc loves being with his daughter and renovating his home built in 1940.

All home lending products are subject to credit and property approval. Rates, program terms and conditions are subject to change without notice. Other restrictions and limitations apply.
These articles are for educational purposes only and provide general mortgage information. Products, services, processes and lending criteria described in these articles may differe from those available through Union Savings Bank. For more information on available products and services, and to discuss your options, please contact a Union Savings Bank loan officer.