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Difference between Money Market and Savings Account with Comparison Chart

Updated Dec 10, 2019

Money Market Accounts and savings accounts may sound familiar and in fact, have many similarities. Both are economical instruments offering the users liquidity and security, but there are certain aspects that set them apart. While a savings account is commonly used for putting the monthly savings and slowly developing a fund for the future, a Money Market account is slightly different and is like a hybrid savings account. This account can be considered as a high yielding savings account that has additional benefits. All the features of savings and money market accounts will be discussed here in the following article.

Money Market vs. Savings Account

Basis of comparison

Savings Account

Money Market Account


It is a bank account where a person keeps their savings that slowly grows based on the interests they earn.

It is a bank account where the money kept by the account holder will increase based on the current interest rates in the money market.

Rates of interest

Low rates of interest.

Higher rates of interest.


Guaranteed returns according to interest rates.

There is no guarantee of getting higher returns.

Investment duration

This is suitable for people looking for long-term investments and building their wealth over time.

This is suitable for people looking for short term monetary goals like 4 months to a year.


This is a very safe option and involves no risk at all.

This investment an option involves risks like interest risk, reinvestment risk, and credit risk.

Accessibility of funds

Funds can be accessed easily here.

Accessibility to the funds are limited.

Provision of ATM cards

ATM cards are provided for some accounts.

They are usually not provided but some banks can provide a convenience card.

Withdrawal restrictions

3 to 6 withdrawals can be made in this account.

3 to 6 withdrawals can be made only on a certain portion of the account balance.

Cheque facilities

Allows the users to write up to 3 cheques per month.

Cheque writing facilities are not provided to the users.

Minimum balance

The minimum balance can be $1000 or more.

Some banks may or may not have a minimum balance.

What is a Money Market Account?

A money market is a part of the financial market where short-term funds are exchanged. These funds have high liquidity and have the potential to provide attractive returns to the user. A money market account is required to invest money in such a market. It is a savings account that has the potential to give good monetary benefits to the account holder. You have to deposit an amount that is slightly higher than normal. The account will offer a debit card if your deposit amount exceeds a minimum threshold.

Some money market accounts provide the account holders cheque writing privileges to access the money in the account.

When Should I Use a Money Market Account?

A money market account should be opened when the user is looking for a safe place to deposit a significant amount of money and gain interest. As the returns are better than savings accounts, it can be useful for achieving monetary goals in the near future. These accounts are beneficial for developing an emergency fund. It can be used for preparing a budget for paying the taxes properly, without affecting the cash reserves. If the account holder is willing to take a calculated risk with their money, a money market account can be a good option.

The account will provide the user with the privilege of accessing the funds by writing up to six cheques per month. Along with all this, the account provides the safety of a reputed bank or a credit union. However, it is advised to select an account that requires you to maintain a reasonable minimum balance.

What is a Saving Account?

A savings account is a deposit account. You receive a decent monthly interest rate on your deposit. These types of accounts are provided by banks, credit unions, and other financial institutions. The account holders utilize their savings accounts for storing funds on a regular basis and withdrawing them as and when you need. This account works a very safe investment option and also lets you transfer funds easily. This account does not require a substantial amount of money to be deposited by the user. Many financial institutions offer specialized services along with the savings account to women, kids and retired professionals for their pension account. The account offers the flexibility to select the account type according to the user’s lifestyle.

However, this account may not be suitable for people looking for earning a decent amount of cash within a short time period.

When Should I Use a Savings Account?

If someone is looking for an investment option with absolutely no risk, putting his or her money in a savings account is the right way to go. If the user has time and wants to build their wealth slowly, the interests offered by the savings account will be useful. If someone does not have enough wealth to invest, a savings account is the best option as it has a low minimum deposit. The money will increase slowly but steadily and will not be affected by economic fluctuations in the market. Compared to all other financial instruments, a savings account provides a lot of liquidity to the account holders.


After understanding the differences between money market and savings accounts, it can be seen that both have their pros and cons. Perhaps opening a money market account is necessary to earn attractive returns, but if the person has to make frequent withdrawals, it might not be an intelligent decision. On the other hand, investing all funds in a savings account might not support the development of funds after retirement.

Therefore, selecting the account type depends upon the user’s financial targets and their current financial condition. Thorough research is required before selecting the account that provides maximum benefit.