Final answer:
Money can accumulate through compound interest which earns interest multiple times on the initial deposit and the accumulated interest, while CDs offer higher rates with potential early withdrawal penalties, and regular savings accounts typically offer interest as well.
Step-by-step explanation:
When considering the best ways for your money to accumulate, you need to understand the different types of interest that can be applied to your savings and investments. Compound interest is the characteristic where money earns interest multiple times; it is incredibly effective, as it grows by earning interest on both the initial deposit and the accumulated interest over time.
On the other hand, simple interest is when money earns interest once on the initial deposit. Certificates of Deposit (CDs) often offer higher interest rates and include a penalty clause, where interest may be calculated as a penalty for early withdrawals. Lastly, regular savings accounts are a common saving option where interest is offered on most savings options.