Money Market Account vs Savings Account
Money market accounts and savings accounts can both be used for cash. The right choice depends less on the name and more on access, fees, rate, insurance, and how quickly you may need the money.
How they compare
| Feature | Savings account | Money market deposit account |
|---|---|---|
| Main use | Holding cash separately from spending money. | Holding cash with possible check, debit, or higher-balance features. |
| Access | Usually transfers to checking or external accounts. | May include checks or debit access, depending on the bank. |
| Fees | Can have monthly or excess transaction fees. | Can have higher minimum balance requirements. |
| Insurance | May be insured when held at an eligible insured institution. | Money market deposit accounts may be insured; money market mutual funds are different. |
United States and Canada context
In the United States, the Federal Deposit Insurance Corporation says covered deposit accounts include savings accounts and money market deposit accounts at insured banks, within applicable limits. In Canada, Canada Deposit Insurance Corporation coverage applies to eligible deposits at member institutions, but products such as mutual funds, stocks, exchange-traded funds, and cryptocurrencies are not eligible deposits.
What to check before choosing
Confirm whether the institution and product are covered by the relevant deposit insurer.
Emergency cash should be reachable without selling investments or waiting too long.
A higher rate can be less useful if fees or minimum balance rules are hard to meet.
Cash for emergencies should usually be more stable than cash for long-term investing.