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Money market vs. savings accounts: What’s the difference?

Compare savings options, interest rates and balance requirements.

Choosing between a money market vs. savings account can be tough. Use this guide to find out which one is best for your savings goals.

What’s the difference between money market vs. savings accounts?

A savings account earns a competitive APY and gives a safe place to store funds. A money market account is a type of savings account, but it comes with special checking account features that give you more access to your money. This table breaks down the major differences between money market vs. savings accounts:

Money marketTraditional savings
Best forThose who want checks, a debit card and flexible access to their money while they save.Those who want an account with little to no minimum deposit or monthly balance requirements.
National interest rate average0.09%0.06%
Check writingYesNo
ATM accessYesVaries by account
FDIC or NCUA insuranceYesYes
Minimum deposit$1,000+$0–$1,000
Six-transaction limitYesYes

Why might money market accounts pay more interest than traditional savings accounts?

When you deposit money in a traditional savings account, the bank is allowed to loan your money to other institutions or customers and will pay you interest in exchange. With a money market account, the bank has more freedom to invest your money in ways that could produce higher returns, so it’s willing to pay you a higher interest rate.

Money market vs savings account: Which is best for me?

Money market and traditional savings accounts are both effective ways to save, but the best option for you depends on your situation:

Money Market Logo

Pick a money market account if …

  • You can meet higher deposit requirements.
  • You need more flexible access to your money.
  • You want a debit card or check-writing privileges.
  • You want to be able to spend money more easily.
  • You have a large sum of money to deposit.

Read more

Savings Logo

Pick a traditional savings account if …

  • You have trouble limiting your spending.
  • You’re just starting to save.
  • You don’t plan on spending the money in the near future.
  • You want to open the account with a small deposit.
  • You want to avoid fees.

Read more

Pros and cons of money market vs. savings accounts

Both money market and traditional savings accounts provide you a safe place to store your money. But the APY you’ll earn and the flexibility you’ll have to access your funds are two main ways they differ. Weigh the pros and cons:

Money market accounts

Pros
  • Flexible access. With a debit card and check writing abilities, you can cover expenses, pay bills and more — as long as you keep it to less than six transactions.
  • Potentially higher rates. Money market accounts often have slighter higher interest rates than traditional savings accounts, so you could save more money.
Cons
  • Higher deposit requirements. Money market accounts often have higher deposit requirements than traditional savings accounts.
  • Easier to overspend. With such easy access to your money, it could be tempting to spend money instead of leaving it to earn interest.
  • More fees. Watch out for overdraft fees, transfer charges and other fees.

Traditional savings accounts

Pros
  • Encourages saving. You won’t get a debit card or check writing abilities, so it’s harder to dip into your savings.
  • Lower deposit requirements. Traditional savings accounts generally have lower deposit requirements than money market accounts, making it easier to start saving.
Cons
  • Potentially lower interest rates. Interest rates on traditional savings accounts are often slightly lower than money market accounts.
American Express® High Yield Savings
0.4% APY

Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.

Apply now
on American Express's secure site
APY 0.4%
Fee $0
Minimum deposit to open $0
New account fee $0
Minimum balance to earn interest $1
Interest compounding Daily

How to compare money market vs. savings accounts

Consider these features when trying to decide between a money market and traditional savings account:

  • Interest rates. Generally money market accounts pay a higher APY — but that usually depends on a higher opening deposit.
  • Deposit requirements. Money market accounts usually require a high opening deposit of at least $2,500. If you don’t have significant savings, you might want to consider a traditional savings account.
  • Features. Explore and compare account features like reward programs, mobile banking and budgeting tools.
  • Fees. Look out for service fees for balance minimums, withdrawing funds and outgoing wires.
  • Access. Consider how much you want access to your money. Federal regulation limits both accounts to six withdrawals. But this rule could be temporarily waived due to the coronavirus pandemic. Check with your provider.
  • Security. Regardless of which account you choose, find out if it’s covered by FDIC deposit insurance or any other security features.

Compare money market vs. CDs

Compare money market and savings accounts

Use the table to compare money market and savings accounts by APY, minimum deposit, features and more. If multiple accounts catch your eye, click the “Compare” box to view them side-by-side.

Name Product Annual percentage yield (APY) Fee Minimum deposit to open
Axos Bank High Yield Money Market account
Finder Rating: 4.1 / 5: ★★★★★
Axos Bank High Yield Money Market account
0.25%
$0
$1,000
Offers the security of traditional savings with the advantage of high interest rates and limited transactions.
Ponce Bank Money Market Deposit
Finder Rating: 4 / 5: ★★★★★
 Ponce Bank Money Market Deposit
0.41%
$0
$1
Ponce Bank Money Market Deposit account, offered through SaveBetter, has a $1 opening deposit and earns 0.41% APY.
Quontic Bank Money Market
Finder Rating: 4.6 / 5: ★★★★★
Quontic Bank Money Market
0.40%
0.35%
0.30%
$0
$100
Competitive rates, no monthly fees, user-friendly online banking platform
CIT Bank Money Market
Finder Rating: 3.9 / 5: ★★★★★
CIT Bank Money Market
0.45%
$0
$100
A savings account with a higher-than-average rate and minimal fees.
UFB Direct Premium Money Market Account
Finder Rating: 2.9 / 5: ★★★★★
UFB Direct Premium Money Market Account
0.20%
0.10%
$10 per month
(can be waived)
$5,000
Enjoy the security and earning potential of a savings account while maintaining the flexibility to write checks.
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Compare up to 4 providers

Name Product Annual percentage yield (APY) Fee Minimum deposit to open
Aspiration Spend & Save Account
Finder Rating: 4.2 / 5: ★★★★★
Aspiration Spend & Save Account
5.00%
$0 per month or $7.99 per month for Aspiration Plus ($5.99 per month if you pay annually)
$10
Deposits are fossil fuel-free. A spend and save combo account with unlimited cash back rewards and deposits insured by the FDIC and a $100 bonus when you spend $1,000 in your first 60 days.
Axos Bank High Yield Savings
Finder Rating: 4 / 5: ★★★★★
Axos Bank High Yield Savings
0.61%
0.25%
0.15%
$0
$250
No monthly maintenance fees. No minimum balance requirements. Interest compounded daily.
BlockFi Interest Account
BlockFi Interest Account
Up to 8.25%
$0
$0
Score up to 8.25% APY with this free crypto-interest account. Not available in New York and not FDIC insured.
American Express® High Yield Savings
Finder Rating: 4.6 / 5: ★★★★★
American Express® High Yield Savings
0.40%
$0
$0
Enjoy no monthly fees and a competitive APY with this online-only savings account. Accounts offered by American Express National Bank, Member FDIC.
Gemini Earn
Gemini Earn
Up to 8.05%
$0
$0
Watch your cryptocurrency earn up to 8.05% APY with this nationwide account. Not FDIC insured.
loading

Compare up to 4 providers

Bottom line

Money market accounts provide flexible access and higher interest rates, but often have higher deposit requirements. Traditional savings accounts, on the other hand, can limit spending and have lower deposit requirements, making it easy to start saving. Compare your options for the best savings accounts and best money market accounts to find one that’s right for you.

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