Differences between Money Market Account and Savings Account

Comparison Article

A money market account (MMA) and a savings account are both types of interest-bearing deposit accounts offered by banks and credit unions. Funds in both account types are typically insured by the FDIC up to the maximum allowed by law. While both are used for saving money, they differ in terms of fund accessibility, interest rates, and minimum balance requirements. A money market account combines features of both savings and checking accounts, often providing a debit card or check-writing privileges, which are not typically offered with standard savings accounts.

It is important to distinguish a money market account, which is a bank deposit product, from a money market fund, which is a type of mutual fund investment. Money market funds are not FDIC-insured.

Comparison Table

Feature	Money Market Account	Savings Account
FDIC Insurance	Yes, up to standard limits at insured banks	Yes, up to standard limits at insured banks
Interest Rate	Typically higher than traditional savings accounts, often tiered based on balance	Varies; high-yield savings can be competitive, but traditional accounts are often lower
Access to Funds	Check-writing, debit card, and ATM access are common	ATM withdrawals, in-person transactions, and electronic transfers are standard; no check-writing
Minimum Balance Requirements	Often requires a higher minimum deposit and ongoing balance to earn the best interest rates or avoid fees	Often has a low or no minimum balance requirement
Fees	May charge monthly fees if minimum balance is not met	Monthly fees may apply, but are often waived with a minimum balance or direct deposit

Venn diagram comparing Differences between Money Market Account and Savings Account

Regulation and Transaction Limits

Historically, both savings and money market accounts were subject to the Federal Reserve's Regulation D, which limited certain types of withdrawals and transfers to six per month. These "convenient" transactions included pre-authorized transfers, telephone transfers, and online transfers. The purpose of this rule was to differentiate savings-focused accounts from transaction-focused checking accounts.

In April 2020, the Federal Reserve amended Regulation D, eliminating the six-per-month transaction limit to give depositors easier access to their funds. However, the change permits but does not require financial institutions to lift the restrictions. As a result, many banks and credit unions may still choose to enforce monthly withdrawal limits and charge fees for exceeding them. Withdrawals and transfers made in person at a bank branch or at an ATM typically do not count toward this limit.