Lauren Smith, WalletHub Staff Writer
@laurenellesmith
Yes, a money market account is a type of savings account. Money market accounts tend to have higher minimum balance requirements than traditional savings accounts, but money market accounts offer higher interest rates and usually allow you to pay your bills, use a debit card and write checks.
You can compare the best money market accounts and the best traditional savings accounts here at WalletHub. You can also learn more below.
Types of Savings Accounts
- Traditional savings account
- High-yield savings account
- Money market account
- Certificate of deposit (CD)
- IRA savings account
- 529 college savings account
- Health savings account (HSA)
- Online savings account
Money Market Account vs. Traditional Savings Account
| Feature | Money Market Account | Traditional Savings Account |
| Earns interest | Yes | Yes |
| ATM withdrawals/ATM Card | Yes | Yes |
| Check-writing | Yes | No |
| Debit card | Yes | No |
| Online bill pay | Yes | No |
| Automated deposits | Yes | Yes |
| FDIC/NCUA insurance | Yes | Yes |
Key Things to Know About Money Market Accounts
- Higher Interest Rates: Money market accounts typically offer higher interest rates than regular savings accounts. This can help your money grow faster.
- Minimum Balance Requirements: Money market accounts often have higher minimum balance requirements than traditional savings accounts. It's important to understand and maintain the required minimum balance to avoid unnecessary fees.
- Access to Funds: Money market accounts typically provide easy access to your funds. You can make withdrawals or transfers, although there may be limitations on the number of transactions per month.
- Additional Features: Money market accounts may offer features such as checks, debit cards, and bill payment options, which can provide added convenience and flexibility.
- FDIC or NCUA Insurance: Money market accounts offered by reputable banks or credit unions are typically insured by the FDIC or NCUA, respectively, up to $250,000.
- Potential Fees: Money market accounts may have fees associated with them, such as monthly maintenance fees or penalties for dropping below the minimum balance requirement. It’s best to review the fee structure and account terms before opening an account.
People also ask
What's the point of a money market account?
The point of a money market account is that it serves as a good option for parking short-term funds and earning slightly more interest than a traditional savings account. There are many purposes depending on your financial needs and goals. Here are some key points to consider:
- Higher interest than savings accounts: While both are safe and insured, money market accounts typically offer slightly higher interest rates compared to traditional savings accounts. This means your...
What is a money market account?
A money market account is a type of savings account that usually comes with certain checking-account features, like a debit card and checks, while often providing higher interest rates than many standard savings accounts. In exchange for these features, the number of transactions you can make per month will be limited. The minimum balance required to avoid a monthly fee will often be higher than with other bank accounts, too.
Like savings and checking...
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