Money Market vs. Savings Accounts: Which Is Best for Your Savings?

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Saving is an essential part of personal finance. Whether you’re saving for a new car, a new home, a vacation or anything else, it’s important to save regularly and put your funds in the best account for your goals. In many cases, that may be a high-yield savings account or a money market account (MMA). Here's how money market accounts compare with traditional savings accounts so you can find the right account type for your financial future.

Money Market Accounts vs. Savings Accounts

Whether you’re saving for a specific goal or an emergency fund, savings accounts are often the best place to put your money. If you’re signing up for a savings account, you may find several options available. Among the most popular are money market savings accounts and savings accounts.

A money market account is a unique type of savings account available at many banks and credit unions. There are two key differences between a money market account and a savings account: You can typically write checks directly from a money market account account and you might earn a higher interest rate than what you'll find with a traditional savings account. However, the best high-yield savings accounts often beat the APYs on both MMAs and traditional savings accounts.

Recommended High-Yield Savings Accounts

Bank Account	APY	Features	Learn More
BrioDirect High-Yield Savings Account Open Account	4.85% More Info *Annual Percentage Yield (APY) is variable and is accurate as of 11/15/2024. Rate is subject to certain terms and conditions. You must deposit at least $5,000 to open your account and maintain $25 to earn the disclosed APY. Rate and APY may change at any time. Fees may reduce earnings.	$5,000 min. deposit No monthly fee	Open Account
Axos ONE® Savings and Checking Bundle Open Account	Up to 4.86% More Info Earn up to 4.86% APY on savings, and 0.51% APY on checking when you meet requirements.	No minimum deposit No monthly fee	Open Account
SoFi Checking and Savings Open Account Member FDIC Member FDIC	0.50% - 4.00% More Info SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.	No minimum deposit No monthly fee	Open Account
CIT Bank Platinum Savings Account Open Account	4.55% More Info Earn 4.55% APY on balances over $5,000. Balances of less than $5,000 earn 0.25% APY. Annual Percentage Yield is accurate as of November 13, 2024. Interest rates for the Platinum Savings account are variable and subject to change at any time without notice.	$100 minimum deposit No monthly fee	Open Account

What Are Money Market Accounts?

Money market accounts are a type of savings account available at many banks and credit unions. When you’re looking to sign up for a new savings account, you may see MMAs listed as an option as well.

As mentioned, you get two main benefits with an MMA—the account may feature a higher interest rate than other savings accounts. And they may come with an optional checkbook, which you don’t get with regular savings accounts.

You may have a higher minimum balance requirement to avoid fees with an MMA (if there are any recurring fees). But it’s very similar to a standard savings account.

What Are Money Market Funds?

Money market accounts shouldn’t be confused with money market funds. Money market funds are a type of mutual fund. Money market mutual funds invest in short-term assets like U.S. Treasuries, CDs, commercial paper and short-term loans to the U.S. government or other banks. You can invest in a money market mutual fund through a brokerage account.

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Money Market vs. Savings Accounts: Key Features

Here’s a look at the key features of MMAs and savings accounts:

Money Market vs. Savings Accounts: Similarities

Here are some features that savings account and MMAs have in common:

• FDIC or NCUA insurance: Most financial institutions are members of the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). If you have an account with FDIC or NCUA coverage, deposits are covered for up to $250,000 per depositor per account per financial institution. If your bank goes out of business, the government will pay you back for your deposits up to these limits.
• Interest rates: Banks make money by lending out the money their customers keep on deposit. They share some of that income with depositors in the form of interest. Higher interest rates are better. Use annual percentage yield (APY) to compare banks and accounts.
• Debit card: Many savings accounts and money market savings accounts come with an optional debit card. You can use this to get cash from an ATM, and if your card has a Visa or MasterCard logo, you can use it for purchases as well.
• Withdrawal limit: Many accounts have a monthly limit of six withdrawals. If you need to withdraw more often, consider a checking account instead. Teller withdrawals, ATM withdrawals, debit card purchases, online transfers and checks all count toward the monthly limit. At some banks, it’s not a big deal if you go over once or twice. However, it could lead to fees or account closures, depending on the account.
• Minimum balance requirement: The best savings accounts don’t have any recurring fees or minimum balance requirements. However, they are common among many traditional banks. If you fall below the minimum balance requirements for your account, you could wind up paying around $10-$20, which is more interest than many people earn per year from their accounts.
• Other fees: Most bank accounts come with a fee schedule. While you probably won’t need many cashier’s checks or other less common services, make sure there are no fees for anything you plan to do regularly.

Recommended Bank Bonuses

Bank Account	Intro Bonus	Minimum Deposit	Learn More
SoFi Checking and Savings Open Account Member FDIC Member FDIC	$50-$300Expires January 31, 2026 More Info New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 12/3/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.	N/A	Open Account
U.S. Bank Smartly® Checking Account (Member FDIC) Open Account	Up to $450Expires December 30, 2024 More Info Earn up to $450 when you open a new U.S. Bank Smartly® Checking account and complete qualifying activities. Subject to certain terms and limitations. Offer valid through December 30, 2024. Member FDIC. Offer may not be available if you are an existing U.S. Bank customer or live outside of the U.S. Bank footprint.	$25	Open Account
Chase Total Checking® Account Open Account	$300Expires January 22, 2025 More Info New Chase checking customers enjoy a $300 bonus when you open a Chase Total Checking® account with qualifying activities	N/A	Open Account
Key Smart Checking® Open Account	$300Expires December 13, 2024 More Info Earn $300 after qualified activities until 12.13.24 with the no-monthly-maintenance-fee Key Smart Checking®. Geographic restrictions apply and account opening is subject to approval. Offer is available in these states: AK, CO, CT, ID, IN, ME, MA, MI, NY, OH, OR, PA, UT, VT, WA	$10	Open Account
Chase Business Complete Checking® Open Account	$300Expires January 16, 2025 More Info Earn $300 when you open a new Chase Business Complete Checking® account. For new Chase business checking customers with qualifying activities.	N/A	Open Account

When to Choose a Money Market Account

Here are three questions to ask yourself when deciding if you should open an MMA:

1. Which account a higher interest rate? Rates are typically low on most traditional savings accounts. Unless one account has higher fees and you expect to pay those fees, you’re better off with an account that has the highest interest rate. If a high APY is what you're after, check out the best high-yield savings accounts, too.
2. Do I need to write checks? While it’s convenient to use checks, fewer people rely on that option these days. If it's a serious requirement for you, it may be worth picking an MMA even if it has a lower interest rate.
3. Is there a higher minimum balance requirement? Many banks don’t charge any recurring monthly fees, so you may not have to worry about this. But if you find an account with this fee, only sign up if you can meet the requirements to waive the fee or get other benefits that outweigh that cost.

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Pros and Cons of Money Market Accounts

If you’re still on the fence, here are the main pros and cons of money market vs. savings accounts to consider:

Should You Get a Money Market Account or Savings Account?

There are no perfect savings accounts for everyone, but you likely can find the right account for your unique savings needs. Whether you want to keep an emergency fund tucked away in a high-interest account, are saving up a down payment or need money for any other short-term to medium-term goal, a money market account or other high-yield savings account could be a perfect option.