[disneysteve]

Welcome. I think you are on the right track. Money that will be needed in 3-5 years needs to be somewhere safe and secure. I would go with a CD (or more likely several CDs) rather than a Money Market Account (MMA). Here's why. A MMA has a variable interest rate. Also, the rate is typically lower than a CD which is the price you pay for being able to access your money freely. A CD will usually pay a higher rate since you are locking up your money for a set period of time.

With 20K, I'd suggest splitting the money up and laddering, meaning buying CDs of varying terms. The longer the term, to some extent, the higher the rate, though that isn't always true. Also, interest rates look to be on the rise so you don't want to throw all 20K into a 5-year CD right now. You'll probably miss out on higher rates down the line.

Maybe buy a 6-month, 1-year, 18-month and 2-year CD now. That means every 6 months, you have one coming due that you can roll over at the prevailing rate at that time. That also gives you access to part of your money every 6 months just in case something does come up before the 3-5 years are up.

As for online banking, there is not really anything to understand. Banks are banks. Some do business down the road from your home and you can walk in and buy the CD in person. Others do business on the internet and you can mail in your deposit or have it transferred electronically from your bank account. Typically, though not always, online banks will pay higher rates because they have lower expenses. Go to bankrate.com to search for the best CD rates, but still check your local banks because they may have specials or promotional rates that beat the national best.