If you think it doesn't matter where you keep your savings, think again. There are several options for depositing your cash, each with different perks and limitations.

If you choose a money market account (MMA), you'll have easy access to your money, but the interest rate on the account could drop at any time. With Treasury bills (AKA T-bills), the opposite is true: You can't access your money as easily, but your rate of return is guaranteed as long as you leave your money on deposit until the maturity date.

As you can see, those two features alone make these accounts useful for very different savings purposes. Here's everything else you need to know before you decide if an MMA or T-bill is the best destination for your savings.

A money market account is a bank account that combines the features of a checking and savings account, but with higher interest rates on average. For example, MMAs often come with checks and/or debit cards for easier access to your funds. They're also typically insured by the FDIC (or the NCUA if your account is held at a credit union).

Keep in mind, however, that money market accounts often limit the number of withdrawals you can make each month and may also come with higher minimum balance requirements than standard savings accounts.

Read more: Money market account vs. money market fund: What's the difference?

A Treasury bill is a short-term debt security issued by the U.S. Department of the Treasury to help finance government operations. Essentially, it’s like a short-term loan you give to the federal government in exchange for a guaranteed rate of return.

T-bill maturity options range from four weeks to one year, and the rate you earn is determined by the maturity date you choose.

T-bills can be purchased in denominations of $100, with maturity dates of 4, 6, 8, 13, 17, 26, or 52 weeks. You receive your interest when the bill matures. You can also sell early on the secondary market, but your returns will be based on the market price at the time of the sale.

There's no risk of losing your money if you hold a T-bill until it matures, since the U.S. government guarantees your full deposit and interest.

If you want to buy a T-bill, the first step is to set up a TreasuryDirect account. Rates currently range from 3.61% for 52-week bills to 4.11% for 4-week bills.

The main difference between MMAs and T-bills is that an MMA is a type of bank account, while a T-bill is a type of investment.

However, if you shop around, you'll find that some MMAs earn similar rates to T-bills. While the national average money market account rate is 0.59%, some of the best MMAs offer rates over 4% APY. Just keep in mind that, unlike T-bills, the rates on MMAs are variable, meaning they can change at any time.

Here's a look at how MMAs and T-bills compare overall:

Deciding whether a money market account or a Treasury bill is better for you depends on your financial goals, risk tolerance, and liquidity needs. Here’s what to consider when deciding where to put your savings.

An MMA is a better choice than a T-bill if you need access to your money for upcoming expenses or if you don't have any savings for emergencies.

By choosing an MMA, you'll ensure you can make a withdrawal or write a check when you need to use your money without having to face any penalties or lose the interest you've earned. Plus, your balance can earn a competitive interest rate compared to some other types of bank accounts.

A Treasury bill is a better choice than an MMA when all of the following are true:

Savings: You already have an emergency savings fund that you can access any time you need the money.

Timeline: You want to earn interest on money that you don't plan to spend for the next few weeks to a year.

Rate comparison: You can lock in a higher rate by purchasing a T-bill than by depositing your money into an MMA.

Some people also like to buy Treasury bills, versus other low-risk investments like CDs, because they want to support the federal government. When you buy T-bills, the money is used to fund government operations, including things like infrastructure projects and military spending.

If you want to take advantage of high interest rates to boost your savings, it can be worth looking into alternatives to a savings account. Two options are certificates of deposit (CDs) and Treasury bills, which can offer annual percentage yields (APYs) of 5.00% or better and can be excellent options to maximize your savings.

But which of those is better for you? When weighing CDs vs. Treasury bills, here's what you need to know to decide.

Lately, interest in Treasury securities has skyrocketed. From 2011 to 2021, just 2.4 million accounts were created on the TreasuryDirect website. But in 2022 alone, 3.7 million people opened new accounts.

What's behind the demand? Treasury securities, including Treasury bills, also known as T-bills, offer higher APYs than many other savings options right now. And Treasury securities are among the safest places to put your money because they are backed by the full faith and credit of the U.S. government.

They're shorter-term securities; they have maturity dates of one year or less. You can purchase a T-bill with a maturity date of four, eight, 13, 17, 26, or 52 weeks.

T-bills are sold at a discount from the face value of the bill; when the bill matures, you're paid the full face value. As of the end of January 2024, the discount produces returns equivalent to 4.57% to 5.29% APY.

With their maturity dates and returns, T-bills can be useful tools to help you reach short-term financial goals, such as saving for a down payment to buy a home or a new car. Learn more: What is the 10-year Treasury note?

Historically, CDs have been one of the less popular deposit accounts. According to the Federal Reserve, just 6.5% of American adults held a CD as of 2022, the last available data.

But with interest rates higher than they've been in years past, more people are interested in opening CD accounts than before.

When you open a CD, you deposit money into an account and agree to leave it there — without any withdrawals or additional deposits — for a specific period, such as 12 months. CD terms can vary significantly between banks; you can find terms as short as one month or as long as 10 years.

Most CDs pay a fixed rate of interest for the length of their terms. However, the money in the CD cannot be touched until the CD matures. If you withdraw money before its maturity date, you'll be hit with an early withdrawal penalty. Typically, you'll have to forfeit some of the interest you’ve earned.

CDs are a safe investment; the interest rate is fixed for the CD's term, and your deposit in a CD is backed by the Federal Deposit Insurance Corporation (FDIC). With FDIC insurance, deposits of up to $250,000 per depositor per bank are protected against bank failures.

If you’re deciding between CDs and Treasury bills, you should consider how each of them are taxed.

With Treasury bills, the money you earn — the difference between the discounted purchase price and its face value at redemption — is taxable as income on your federal tax return. However, Treasury bills are exempt from state or local taxes.

If you own Treasury bills, the U.S. Department of the Treasury will send you and the IRS Form 1099-INT, Interest Income. The form will list the amount of interest that you earned during the tax year.

Treasury bill earnings or interest is reportable in the year you sell it; the sell date may be a different tax year than when you bought it. For example, if you bought a Treasury bill with a 52-week maturity in April 2023, it would mature — and you'd earn money — in 2024, so you'd report the earnings for the 2024 tax year.

CDs earn interest throughout their terms. The interest you earn on a CD — even if you leave it untouched — is taxable as income. CD interest is taxable at the federal, state, and local levels, meaning CDs carry potentially more of a tax burden than Treasury bills.

As with T-bills, the interest you earn on a CD will be reported on Form 1099-INT. With a CD whose term crosses across tax years or is multiple years in length, you'll receive a 1099-INT for each year that you earn interest.

CDs and Treasury bills provide advantages over traditional savings accounts, but there are some key differences to keep in mind:

Taxation: Your earnings with both T-bills and CDs are taxable as income. However, CDs are taxable at the federal, state, and local levels, but T-bills are only subject to federal income taxes.

Earnings: A CD pays interest at regular intervals throughout its term. Once it matures, you receive the principal and the earned interest. T-bills work differently; they don't pay interest. Instead, you purchase them at a discount, and the difference between the purchase price and the face value at the time of its maturity date is how much money you earn.

Issuer: T-bills are backed by the full faith and credit of the U.S. government, and you can purchase up to $10 million in T-bills (in non-competitive bids). By contrast, CDs are issued by banks, and they're backed by FDIC insurance. Under FDIC rules, deposits of up to $250,000 are protected per depositor and per bank.

Maturity length: Treasury bills have limited term options; terms range from four to 52 weeks. With CDs, you have more options. CD terms can be a few months or several years. A CD with a longer term allows you to lock in a certain APY for a lengthy period.

Investment amount: The minimum purchase amount for Treasury bills is $100. With CDs, the minimum investment varies by bank, but it can be as high as $1,000 or more. A higher minimum investment requirement can be challenging for those who are just starting out or have limited cash.

Liquidity: CDs are not liquid accounts; the money is locked until the CD's maturity date, or you'll have to pay hefty penalties. T-bills provide more liquidity; they can be sold if you need cash fast.

Now that you know the key features of CDs and Treasury bills, you can decide which option is better for your needs. If you're still unsure, consider these scenarios:

If you're saving for a goal less than a year away: If you're saving money for a goal with a short-time horizon, T-bills can make more sense than CDs. They provide a higher APY than savings accounts, and they're more liquid than CDs.

If you want to invest a significant amount of money: With CDs, FDIC insurance only applies to up to $250,000 of deposits per depositor, per bank. If you plan on investing more than that, you'll have to spread your money across multiple banks. T-bills may be a simpler option; they're backed by the government, and you can invest up to $10 million.

If you want to lock in a high APY for several years: With today's current rates, you may want to lock in a high APY for a longer period, such as five to 10 years. If that's the case, CDs are the clear winner over T-bills. The maximum term for a T-bill is 52 weeks, while CDs can have terms as long as 10 years.

Both CDs and Treasury bills are safe options that can help you grow your money faster. Which tool is better for you depends on your goals, how liquid you need your money to be, and time horizon.

Once you've made a decision, you can purchase T-bills online through TreasuryDirect, or view the best CD rates to open a new account.

It was not too long ago that low-risk investments like Treasury bills were the underdogs of the financial world. While T-bills provide a safe place to store your savings while earning a fixed interest rate, they were simply not worth the low returns they offered — especially when compared to the flexibility of savings accounts.

Then, in 2022, something unusual happened: Interest rates started increasing, and they just kept on shooting upward, until the rates on some T-bills, and even savings accounts, passed 5%.

The Fed eventually cut rates in 2024, but rates are still well above 4%. So, anyone who wants to earn a competitive rate on their short-to-mid-term savings would be wise to consider both high-yield savings accounts and T-bills as options.

Which one is best for you: A high-yield savings account or Treasury bill? The answer mainly depends on when you need your money back.

A savings account is a bank account designed to help you save money. These accounts typically earn more interest than checking accounts do, and they're very low risk since most banks insure your deposits up to $250,000.

The downside? Most savings accounts don’t pay much; the national average savings account rate is just 0.45% today. You might earn more interest by leaving your money in a time-bound account like a T-bill or CD, or by investing in the market. Inflation is also likely to outpace your earnings on a savings account.

One way to maximize what you earn on your savings is to use a high-yield savings account (HYSA). These accounts work just like traditional savings account, except they can offer rates as high as 5% APY or more.

Buying a Treasury bill is sort of like making a loan to the U.S. government. T-bills pay you guaranteed interest based on the length of time you invest your money. Rates currently range from 4.06% to 4.64% with terms of four to 52 weeks. You can sell a T-bill before the maturity date, but you'll lose some of the interest you would have earned otherwise.

Additionally, unlike savings accounts, you only pay federal taxes (no state taxes) on the interest you earn on T-bills.

Read more: Do I have to pay taxes on my savings account?

If you have cash you don't plan to use for a couple of months or even for several years, either of these options can be a good place to keep it. But they each serve different purposes.

An HYSA is the best choice for your emergency savings or cash you need for an upcoming expense. Unlike T-bills, you can deposit and withdraw funds to and from a savings account at any time (though withdrawal limits may apply).

When it comes to money you can part with for a few months or more, a Treasury bill can be a good choice.

Here are the features you should compare before choosing a HYSA versus a Treasury bill:

Account fees

Interest rates

Fixed vs. variable rates

Time to maturity

Taxes on interest

Limits on deposits and withdrawals

Whether a Treasury bill or high-yield savings account is better for you depends on your goals and how often you need to access your funds.

T-bills are considered very safe because they’re backed by the government. They can also offer yields comparable to HYSAs. One big benefit of T-bills is the interest income is exempt from state and local taxes, which can be a significant benefit for those in high-tax states.

Meanwhile, HYSAs offer more liquidity, making them better for emergency funds or other situations when you need regular access to your money. HYSAs are also FDIC-insured, meaning up to $250,000 of your deposits are protected if the bank fails.

One of the main downsides to a high-yield savings account is that the rates are variable and subject to change at any time. So, for instance, if the Federal Reserve cuts its target rate, the yield on your HYSA will eventually go down, too.

If you’re looking for alternatives to T-bills with potentially higher returns, one option is a certificate of deposit (CD). These accounts offer fixed rates that can be competitive with or even higher than T-bills. However, CDs have early withdrawal penalties.

For those willing to take on more risk, another option to consider is dividend-paying stocks. These can offer higher returns and some level of income generation, but with much greater volatility than T-bills.

Deciding between bonds and high-yield savings accounts depends on your risk tolerance, time horizon, and need for liquidity. Government bonds (such as T-bills or T-notes) offer a safe, predictable income, but can tie up your money for several months. The yields might be higher, especially for longer-term bonds, but these also carry interest rate risk if you sell before maturity.

High-yield savings accounts, on the other hand, are perfect for liquidity and short-term savings needs, like emergency funds.

If you’re frustrated with the anemic returns that come with traditional savings accounts, the idea of earning a higher return can be appealing. Many banks and credit unions advertise money market accounts that provide higher annual percentage yields (APYs), but they’re an often misunderstood product.

There's a lot of confusion around if a money market account is a savings account. Although money market accounts share several characteristics with savings accounts, there are some key differences you should be aware of before opening an account.

A money market account is another type of deposit account. They are interest-bearing accounts, and often include check-writing privileges. You may be able to make withdrawals with a debit card at an ATM.

Like savings accounts, money market accounts have restrictions on how often you can make withdrawals or transfers; you can usually make no more than six per month.

Money market accounts usually provide higher APYs than savings accounts, so using a money market account could help your money grow faster.

As a type of deposit account, money market accounts are also backed by the FDIC and NCUA up to $250,000.

A savings account is a type of account you can open with a bank or credit union. You can use savings accounts to set aside money for a rainy day or to save for a future goal, like a down payment on a dream house.

By stashing money in a savings account, you can earn interest, and your money can grow over time. The trade-off is that you are limited in how many times you can access your account; typically, banks limit you to six monthly withdrawals or transfers.

That restriction means a savings account isn’t a good option for paying bills or covering routine expenses, and you don’t have access to a debit card for ATM withdrawals. Instead, a savings account is meant to be used sparingly so you can save for your goals.

Savings accounts are protected by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA), so deposits are insured up to $250,000.

At first, money market accounts can seem interchangeable with savings accounts. But there are some crucial differences you should consider:

Interest rates: Generally, money market accounts have higher APYs than traditional savings accounts. As of June 13, 2023 – the last available data – the average APY for savings accounts was 0.40%. For money market accounts, the average APY was 0.59%. Over time, the higher rate on money market accounts could help grow your money faster.

Minimum deposit and balance requirements: Although minimum deposit and balance requirements vary by bank or credit union, money market accounts usually have higher minimums than savings accounts. You can often find savings accounts with $0 minimums, but money market accounts can have minimums as high as $2,500.

Liquidity and accessibility: Banks usually limit customers to six monthly withdrawals and transfers on both savings and money market accounts. However, accessing your money is often easier with a money market account. Money market accounts allow you to write checks or withdraw money with a debit card, whereas you can only get money out of a savings account by transferring it to another account or by visiting a bank in person and withdrawing it through a teller.

Fees: When it comes to account fees or monthly maintenance fees, money market accounts tend to be more expensive than savings accounts. Savings accounts usually have low or no fees at all, or you may qualify for a fee waiver if you maintain a certain balance. By contrast, money market accounts usually charge between $5 and $25 per month.

Now that you know the differences between money market accounts and savings accounts, you can decide which account type is best for you. If you’re not sure, consider these scenarios:

With some money market accounts, you need hundreds or even thousands of dollars available to open an account. Meeting minimum deposit requirements can be challenging for young adults or new savers.

When you want to open a new account quickly but don’t have much cash available, a savings account with low or no minimums may be better than a money market account.

Read more: How much money should you keep in a savings account?

Money market accounts typically have much higher APYs than savings accounts, so they can make sense for people that want to maximize their savings. Particularly if you have a substantial amount of money to tuck away — such as $25,000 or more — and can qualify for the highest-advertised APYs on money market accounts, your money can grow much faster than if you opted for a savings account.

When you are starting to build an emergency savings fund or save for other goals, seeing monthly fees chip away at your interest can be frustrating. For those that want to keep fees to a minimum, a savings account is usually a better option than a money market account; you can find many banks and credit unions that offer savings accounts with no monthly fees.

If you want to be able to quickly and easily access your savings in a bind, a money market account likely makes more sense than a savings account. With a money market account, you can take out money by visiting an ATM or by writing a check, whereas savings accounts are more limited.

Now that you know that money market accounts are different from savings accounts, you can decide whether money market accounts have a role in your financial plan.

Money market accounts tend to have higher APYs and are more accessible than savings accounts. But on the other hand, they usually have higher deposit minimums and monthly fees.

Which account type makes the most sense depends on your finances and future goals for the money you save. Whatever account type you choose, shop around before choosing a bank or credit union; APYs, account minimums, and monthly fees vary significantly between financial institutions, so taking the time to find the highest APY with the lowest fee can pay off.