What are the Differences Between Money Market and Savings Accounts?

What Is Money Market Account?

What Is a Savings Account?

What Are the Difference Between Money Market and Savings Account?

Here are the key differences between MMAs and savings accounts:

Money Market Account Savings Account
Earns higher interest than a regular savings account Earns higher interest than a checking account but lower than a money market account
Minimum balance required is usually higher Lower minimum balance required
Better access to funds Limited options for funds or withdrawals

These differences are further explained for a better understanding.

  • Interest Rates: Another thing that makes a big difference between a money market account and a savings account is the interest rates. MMAs often offer higher interest rates than savings accounts. Money market accounts often earn depending on the account balances, with more balances earning better interest rates.
  • Deposit Requirements: The minimum deposit requirement for money market accounts is usually higher than for savings accounts. It depends on the bank or the financial institution, so you should check this amount before opening an account.
  • Accessibility: The main difference between the money market and savings accounts is the accessibility to the funds. You can access your funds through debit cards with money market accounts.

On the other hand, you can often access your savings account through debit card of your checking account. The savings account does not offer any debit card by itself. Also, you cannot write checks directly from your savings accounts either.

How Money Market and Savings Account Work?

Savings Accounts Working

Which Is Better Among Money Market Account and Savings Account?

Tips for Choosing the Right Bank Account

FAQs About Money Market vs. Savings Accounts

How to choose the right money market account?

When choosing MMAs, the most important consideration is interest rates. But there are a few other factors to consider, such as a minimum initial deposit, a requirement for balance maintenance, the number of transactions allowed per month, accessibility tools, and fees.

Which is safer: a money market account or a savings account?

Both money market accounts and savings accounts are safe places to keep your money.

Is there any alternative to money market and savings accounts?

A money market fund or MMF can be a good alternative to savings and money market accounts, as it is highly liquid and comes with debit cards and checks. Another possible alternative is a high-interest checking account offering high interest rates with a flexible withdrawal system.