Savings accounts and money market accounts are extremely similar account types. In fact, they are so similar that BestCashCow lists them together. Both are basic ways to stash cash while keeping it accessible (they are liquid accounts). But that isn’t where the similarity ends - both savings and money markets are insured up to $250,000 by the Federal Deposit Insurance Corporation (or FDIC) at banks, or the National Credit Union Administration (or NCUA) at credit unions.
Most importantly, both savings and money market accounts pay interest – sometimes a high yield – and are therefore appropriate places to hold enough cash for a rainy day in any environment, and can be attractive places to hold cash versus stocks or bonds depending on your outlook for the economy.
Accountholders of both savings and money markets can avoid any sort of monthly fees for a very low minimum deposit (as low as zero). See a list of the best online rates with the minimum amount necessary to avoid fees here.
Federal regulations may limit savings and money market accounts to six transfers per month (including internet, telephone, etc.), and no more than three of those can be by check, draft or debit card. The account holder can make unlimited withdrawals by teller, ATM or by mail (or by ACH instituted from an external institution).
Where a money market account is different from a savings account is that it adds some of the benefits of a checking account, enabling certain check writing services. However, some banks automatically link high-yield savings accounts to matching checking accounts in order to provide the same service. Regardless of whether you are opening a money market account, you may need a separate checking account to perform essential checking and bill payment services (see the best free checking account options here).
In short, we at BestCashCow do not believe that depositors need to be concerned at all about whether they are opening a savings account or a money market account. We think that depositors should look for the best rates and best service. That can come from online banks or it can come from brick and mortar banks near you.