Money market vs. savings accounts
Posted in: Banking
When researching bank rates, you will often see money market account rates and savings account rates lumped together. Although they are often found together, these two types of bank accounts are different products.
Money market accounts (MMAs) and savings accounts are similar in that both are deposit accounts in which the depositor earns interest on their balance.
In addition, both MMAs and savings accounts can have varying interest rates and varying methods of computing interest.
However, access to funds is more limited with money market accounts, as compared to savings accounts. With MMAs, depositors are often limited as to how often they can withdraw money and how much money they can withdraw at a given time. With savings accounts, access to funds is often unlimited.
When choosing between a money market account and a savings account, take this into consideration. If you are not going to be OK with limited access to funds, a traditional savings account may be the best option.
Recommended reading: Evaluating savings account options
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