Savings Account vs Money Market: What's the Difference?
They sound similar and work similarly—but there are key differences. Here's how to choose between savings accounts and money market accounts.
💡 The Short Answer
For most people, high-yield savings accounts are the better choice. They typically offer equal or higher rates than money market accounts, with simpler terms. Money market accounts add check-writing and debit card features—but you probably don't need those for your savings.
| Feature | Savings Account | Money Market |
|---|---|---|
| Typical APY | 3.5% - 4.6% | 3.5% - 4.5% |
| FDIC Insured | ✓ Yes ($250K) | ✓ Yes ($250K) |
| Check Writing | ✗ No | ✓ Yes (limited) |
| Debit Card | ✗ Usually not | ✓ Often yes |
| Minimum Balance | Often $0 | Often $1,000+ |
| Monthly Fees | Usually $0 | Sometimes $5-15 |
| Best For | Most savers | Large balances + access needs |
What Is a Savings Account?
A savings account is a deposit account designed for storing money you don't need immediately. Key features:
- Interest earnings: Your balance earns APY (currently 3.5-4.6% at online banks)
- FDIC insured: Protected up to $250,000 per depositor
- Limited transactions: Designed for saving, not spending
- No checks or debit card: Access via transfer or withdrawal
Savings accounts are the most straightforward way to earn interest on cash you're setting aside.
What Is a Money Market Account?
A money market account (MMA) is a hybrid between savings and checking. Key features:
- Interest earnings: Similar rates to savings accounts
- FDIC insured: Same $250,000 protection
- Check-writing: Write a limited number of checks per month
- Debit card: Often includes ATM/debit access
- Higher minimums: Often require $1,000-$10,000 to avoid fees
Money market accounts offer more flexibility than savings, but often with more requirements.
Important: Money Market Account ≠ Money Market Fund
⚠️ Don't Confuse These
- • Bank deposit account
- • FDIC insured
- • Zero risk to principal
- • Investment fund (mutual fund)
- • NOT FDIC insured
- • Small risk to principal
Money market funds are offered by brokerages like Fidelity or Schwab. They're generally safe but can lose value (as happened briefly in 2008). Money market accounts are bank products with full FDIC protection.
When to Choose a Savings Account
Choose a high-yield savings account if:
- You're building an emergency fund: Simple, high-rate, no minimums
- You have less than $10,000: Avoid minimum balance requirements
- You don't need check access: You'll transfer to checking when needed
- You want the highest rate: HYSA rates often beat MMAs
- You want simplicity: Fewer rules and requirements
When to Choose a Money Market Account
Choose a money market account if:
- You need occasional check-writing: Pay a contractor, large purchase
- You want a debit card: ATM access to savings
- You have large balances: $25,000+ where minimums aren't an issue
- You're self-employed: Need to write occasional business checks
Rate Comparison: It's a Wash
Historically, money market accounts paid higher rates than savings accounts. Today, that's no longer consistently true.
Current Rates (January 2026)
At most banks, savings and money market rates are identical. The differentiator is features, not yield.
The Check-Writing Feature: Do You Need It?
Money market accounts typically allow 3-6 checks per month. But ask yourself: when did you last need to write a check from savings?
Most people:
- Transfer to checking, then write checks
- Use Zelle/Venmo for person-to-person payments
- Use credit cards for purchases (with better protections)
Check-writing from a money market account is a solution to a problem most people don't have.
Minimum Balance Requirements: The Hidden Cost
Many money market accounts require $1,000-$10,000 minimum balances to avoid monthly fees. This creates problems:
- Locked capital: That $5,000 minimum is money you can't touch
- Fee risk: Dip below the minimum, pay $10-15/month
- Not for beginners: Bad for savers building their first cushion
High-yield savings accounts typically have no minimums—your money stays fully accessible.
Our Recommendation
For most savers, a high-yield savings account is the better choice:
- Equal or higher rates
- No minimum balance requirements
- Simpler terms and conditions
- Features you'll actually use
Money market accounts make sense for specific use cases (check-writing needs, large balances, business purposes), but they're not inherently "better" than savings accounts.
Don't let the fancier name fool you—choose the account that matches your actual needs.