The Federal Reserve didn't cut interest rates at its latest meeting. This is fantastic news for savers, as rates of return remain somewhat high on savings options.
If you're searching for places to store your cash, a money market account or high-yield savings account could be wise options to consider. Since both offer different perks, investigating them in further detail can help you decide which option is best for you.
Which is more accessible?
Most money market accounts make accessing your funds easier than high-yield savings accounts. This is because money market accounts usually offer check-writing privileges, and in some cases, even allow you to pay directly from your account with a debit card or easily pull funds from an ATM.
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Check out some of the best money market accounts:
| Account | APY | Min. Opening Deposit |
|---|---|---|
| Quontic Bank | 4.75% | $100 |
| Brilliant Bank | 4.70% | $1,000 |
| Vio Bank | 4.46% | $100 |
| All America Bank | 4.40% | $500 |
| CFG Bank | 4.37% | $1,000 |
| Republic Bank of Chicago | 4.30% | $2,500 |
| Merchants Bank of Indiana | 4.25% | $50 |
| Northern Bank Direct | 4.25% | $5,000 |
| UFB Direct | 4.01% | $0 |
| American First Credit Union | 1.00% - 4.00% | $0 |
| First Internet Bank | 3.61% | $100 |
| BluPeak Credit Union | 2.50% | $100 |
On the other hand, to spend the money in a high-yield savings account, you’ll often have to connect the account to an existing checking account and then transfer funds from one account to the other, making it a bit more difficult to access your cash. For this reason, if an emergency arises and you need quick access to your savings, a money market account has an advantage over a high-yield savings account.
Which is less risky?
Both money market accounts and high-yield savings accounts are solid choices if you're looking for a risk-free way to maximize your savings. This is because both high -yield savings accounts and money market accounts offered by banks or credit unions are FDIC or NCUA insured.
This means that if your bank fails and goes under, you won’t have to worry about losing your hard-earned cash. FDIC insurance protects up to $250,000 in individual deposit accounts and up to $250,000 for each person’s share of joint accounts. NCUA insurance is similar, covering accounts held at credit unions. NCUA insurance covers up to $250,000 per credit union member. These protections cover accounts at both brick-and-mortar banks and online banks.
Which has a higher APY?
Both money market accounts and high-yield savings accounts possess much higher savings rates than traditional savings accounts, with some even offering close to 5% APY. However, high-yield savings accounts sometimes beat out money market accounts when it comes to APY, so it’s important to compare rates before opting for one account over the other. Opening a savings account with a high APY, whether it's a high-yield savings account or a money market account, is a no-brainer. You'll earn interest on your cash (free money!) with little effort on your part.
See our list of top money market accounts and best high-yield savings accounts to compare current rates today. You can also compare current rates among high-yield savings accounts by using the tool below.
What are the minimum balance and deposit requirements?
Many high-yield savings accounts have very low balance and deposit requirements, making them accessible to all people, even those with low savings balances. You can see balance requirements and current rates for some of the best options below:
| Account | APY | Min. opening deposit |
|---|---|---|
| Newtek Bank | 4.55% | $0 |
| BrioDirect | 4.55% | $5,000 |
| Poppy Bank | 4.50% | $0 |
| Jenius Bank | 4.50% | $0 |
| My Banking Direct | 4.45% | $500 |
| Popular Direct | 4.40% | $100 |
| Bread Savings | 4.40% | $100 |
| Western Alliance Bank | 4.30% | $500 |
| Evergreen Bank Group | 4.25% | $100 |
| Forbright Bank | 4.25% | $250 |
| Ivy Bank | 4.25% | $2,500 |
| Flagstar Bank | 4.20% | $25,000 |
| RBMax | 4.15% | $10 |
| Upgrade | 4.14% | $1,000 |
| Laurel Road | 4.00% | $0 |
On the other hand, when compared to high-yield savings accounts, money market accounts often have higher minimum balance requirements. With a high minimum balance requirement, it's easier to fall below your account minimum, making you more likely to incur fees. However, there are exceptions; you can find money market accounts with no or low balance requirements.
Bottom line
Overall, both money market accounts and high-yield savings accounts have their pros and cons. So, when should you choose a money market account over a high-yield savings account?
Typically, money market accounts are better suited to people with larger amounts of money they’re looking to save, as they’ll be able to meet any minimum balance requirements and therefore avoid fees. On the other hand, individuals who are just beginning to save and don’t have large amounts of cash to put in an account should opt for a high-yield savings account (or a money market account with a low minimum balance requirement).
Additionally, because cash is more accessible in a money market account, these accounts make good options for individuals who plan on spending from the account every so often. If you don't plan on withdrawing cash from your savings, unless in an emergency, opt for a high-yield savings account with a high APY.
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