What Is the Difference Between a Money Market Account & a Savings Account?

When you compare money market accounts to savings accounts, you will see that there are quite a few differences. Each account has its advantages and disadvantages. After you review each, you will be able to determine which of these saving accounts will help you meet your goals and objectives. Once you choose an account, you will be required to adhere to the terms and agreements outlined by your financial institution.

Opening Deposit

If you have a savings account, your opening deposit will be somewhere in the area of $50 to $100 depending on the bank. The opening deposit for a money market account can be $1,000 to $2,500 depending on the bank.

Withdrawals

With a savings account you can make as many withdrawals or transactions as you would like. If you have a money market account you are limited to three to six transactions per month.

Checks

Savings accounts do not allow you to write checks. Money market accounts allow you to write 3 checks per month.

Interest Rate

The rate of interest on savings accounts can be very low while money market accounts will pay a rate of interest substantially higher.

Minimum Balance

A savings account will have a minimum balance requirement that is much lower than a money market account. The savings account minimum will be approximately $50 and the money market account minimum can be around $500. Requirements vary from bank to bank.

About the Author

Melvin J. Richardson has been a freelance writer for two years with Associated Content, and writes about topics such as banking, credit and collections, goal setting, financial services, management, health and fitness. Richardson has worked for several banks and financial institutions and gained invaluable experience and knowledge. Richardson holds a Master of Business Administration in Executive Management from Ashland University in Ashland Ohio.