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Money Market Account vs Saving Accounts

hi guys and welcome on this video we are

going to review the different aspects of

two of the most common investment tools

money market accounts MMA's and savings

account how do they work the pros and

cons in each of them and the difference

between them in terms of interest

flexibility withdrawal and more what is

a savings account when it comes to the

best place to deposit your money you're

looking at a savings account these

accounts give you the ability to not

just deposit money but to keep it safe

and still withdraw money too and you'll

earn interest for the most part you're

going to get these with a bank or credit

union and they'll be FDIC insured of

course you're not going to get much in

the way of interest with the average

amount being under 2% as of 2019 even

still a little is better than nothing a

savings account is considered a time

deposit these are accounts that your

bank can require you to keep for a set

period of time without making a

withdrawal or they can charge you some

type of penalty usually you won't have

these requirements but you may have a

limit on the number of withdrawals that

you can make in an account in a single

month you also might have fees monthly

for these types of accounts and those

fees might be based on how much money

you have in the account plus you're not

going to get cheques the federal

government actually limits the number of

times that you can with your money out

of a savings account in a single month

though you can make as many deposits as

you want in general telephone or

electronic withdrawals are limited to

only six in a single statement cycle

which generally runs about thirty days

though you'll have to talk with your

institution to find out for sure now

let's see what exactly is a money market

account these types of accounts are

somewhere between a checking account and

a savings account in some of the best

ways for example you're usually going to

get a slightly higher interest rate and

a savings account that will depend on

the institution that you go with though

you're also going to have an ATM card

and the ability to write checks

that means you don't have to go into a

bank or credit union and make a request

for your money of course you may not get

these features so you'll have to talk to

the institution and you may have to

request them generally you're going to

get a slightly higher interest rate here

than you will with the savings account

if you're looking at saving some money

for a specific goal that's more than a

couple years down the road but not quite

a decade out you may want to look at a

money market account larger purchases

like a mortgage could be great for this

type of account because you're going to

get a little more interest built up and

if you're just putting the money into a

savings account of course it's not just

about high interest rates there are

going to be other aspects you need to

pay attention to for example your

institution might require a minimum

balance so you can avoid having to pay

fees the balance may also affect the

interest rate that you get for some it

could be a few hundred dollars and

others might require thousands of

dollars now let's compare between money

market and savings accounts in terms of

interest you've always been able to get

better interest with the money market

account over a savings account these

rates are starting to go down however in

most cases you won't have dramatic

changes however minimum balances are

higher with money market accounts in

general you'll need to have a little

more money in a money market account

than the savings this means you have to

have a set amount in the account

according to the bank it could be

anywhere from one thousand to two

thousand five hundred dollars or more

with the savings account the idea is to

be able to store your money more

securely

that means there's generally no or a low

minimum than other options in fact it's

not uncommon for a savings account to

have absolutely no average daily balance

or opening balance one of the biggest

things that you'll find the difference

between a savings account and a money

market account is how you can access

your money with a money market account

you can generally write checks and you

can get a debit or ATM card

with a savings account you generally

have to call the bank making person

requests or use an electronic transfer

to get your money there are a couple of

features which are quite similar monthly

fees for example when it comes to either

of these types of accounts banks are

generally going to make more an interest

on the loans that they're lending your

money out for then they will spend in

paying interest to you that means

they're likely going to have very little

in the way of fees if anything at all if

it doesn't cost them much of anything

they're not going to worry about

charging you with either of these types

of accounts you could have a set amount

that you're allowed to withdraw at any

given time in general you'll be limited

to six withdrawals in a month or a

billing cycle any more than this and you

could be charged a fee just make sure

you know what the fee is going to be

before you go over your withdrawal limit

in terms of protection and safety you

don't want to keep your money stashed

around your house because it's

definitely not safe there what's great

is that when you open an account with a

bank or credit union it's likely going

to be covered by the FDIC that's the

Federal Deposit Insurance Corporation

and they make these institutions

guarantee your money up to two hundred

and fifty thousand dollars because

they're taking on a lot of your personal

information you don't have to do

anything to get this coverage and you

don't have to pay for it either it's

just there waiting for you on the bottom

line if you're debating between a money

market account and a savings account

keep in mind that you don't have to

choose one or the other you can get some

great benefits no matter which way you

go if you want to make sure your money

is more accessible but still safe you

might want to go with a savings account

they don't give you a lot of access but

they're available if you want to have

more access to your account but you

don't want to have it freely available

like with a checking account then a

money market account might be the better

way to go this type of account gives you

the ability to write checks occasionally

without having to worry about

transferring money but it's not quite as

free and as easy as a check

just remember you can have more than one

and you can have both of these types of

accounts that's it for now on our

website you can find more posts as well

as calculators and other financial tools

which of them is better for you we would

love to know your thoughts so feel free

to share them with us in the comments

below I hope you enjoyed it and don't

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