Money Market Accounts & Savings
Putting your money in a traditional savings account is an obvious answer, but there’s also the option of money market accounts.
Let’s look at the difference.
Saving accounts are one of the most fundamental types of accounts a bank or credit union carries. As a safe and secure place to store your money, a savings account also earns dividends, though the rate is usually pretty low when compared to money markets.
A savings account is often used for:
- Saving up for a big purchase
- Emergency funds
- A complement to a checking account
A+ Tip: When searching for accounts, keep in mind that financial institutions offer different types of savings accounts for different goals. For example, the Affinity Plus WINcentive® Savings gives you a chance to win cash prizes.
Money Market Accounts
A money market account is a dividend-bearing account at a bank or credit union, and it has features of both a savings and a checking account.
Money market accounts:
- Typically offer higher dividend rates than savings accounts
- Are insured by the FDIC and NCUA
- Can have higher fees and minimum balance requirements than savings accounts
- May have check-writing and debit card privileges
A money market account is a way to keep your money earning while you can still access the cash, as opposed to other savings methods, such as certificate accounts.
Saving, Your Way
Choosing between a savings account and a money market account includes various factors, but it’s good to start by thinking about your goals for the money you’re saving. Some people prefer savings accounts, because they don’t want the fees or minimum balance requirements associated with money market accounts. And some prefer money market accounts, because they want a better dividend rate than a traditional savings account offers.
And remember that many banks and credit unions offer high-yield savings products that are similar to money market accounts. So be sure to check all of your options.