What is the different between Money Market and Ragular Saving Account?

Question

what kind of a bank account I should consider to open beside Checking and Saving?

Answer 1

In the US banks offer Money Market Deposit Accounts (MMDA) - these usually pay more than other checking accounts, have a higher minimum deposit and have a limited number of checks you can write on it per month (3?). It usually has a minimum balance and fees associated with falling below the minimum balance.

Regular Savings just pays the stated rate of interest, usually lower than the MMDA. I believe both are protected by Federal Deposit Insurance.

So they are both safe but not to profitable. If you have $3000 or more I would skip the savings account and put it into a money market fund e.g. Vanguard Money Market Prime. Currently pays over 5% on every dollar- even has free checking (checks have to be for $250 or more). It is not insured but is considered very very safe. This combined with a no charge checking account at the bank should enable you to get more interest and not be subject to fees and limitations that exist on the MMDA accounts

Answer 2

Depends on where you have the accounts. Some investment firms will give you a checking account and a money market account. These are investment accounts that are subject to stock market changes. They have risk, very low, but some risk.
At a bank or credit union, they may offer an account labeled as a money market account but actually it is a simple savings or share account that earns a better rate than a regular savings account but has some restrictions on the number of withdrawals you can make. Some allow on-line transfers that do not count. Many money market accounts have tiers; the more you have the higher the interest rate.
If you don't need liquidity, take out 6 month Cd's. Do this every month for 6 months and you create laddered investments that will pay even more interest. Each month one will mature and you can decide to keep it in another CD (rollover), even add to the amount if you've saved some more, or have it put into your checking account to use as needed.

Answer 3

A money market account is really a hybrid it is a savings account with minimal check writing priviledges. It typically requires a higher balance than a regular savings account (on svg a regular savings requires $100-$200 vs. a money market account requires $1000-$2000) but it also offers a higher interest rate (savings being .25% to .5% vs. money market being .5% to 4.0% (depending on the balance)). Any savings account in the US (savings or money market) is limited by federal regulation D to 6 automated or electronic withdrawals with a money market account 3 of these can be checks.

P.S. SCH if you are a bank teller you should know about Reg D restrictions you cannot be allowed more than 3 paper checks per month by any bank.

Answer 4

The difference between a money market and a savings account is the interest. Money Markets usually have a higher interest than a savings account. Also now a days a savings account is mostly used for students that are 18 or younger. When you go to a bank they will automatically open a checking and a money market account for you. You should also consider a checking plus. which is an overdraft protection and a line of credit should you ever need any extra money. It free to have unless you borrow against it. The other benefit of it is that it clears checks faster than having just a regular account. However if you do take money out of the overdraft protection you will be charged interest rate just like any other credit card. the rate varies depending on you goor or bad credit.
Good Luck!

Answer 5

A savings account is a bank account with limited access to funds that pays a fixed interest rate. A money market account is actually NOT a bank account. It is an investment is EXTREMELY short term loans. the earning vary daily based on market conditions. While not federally insured like bank accounts, money market accounts carry very little risk and return more that savings accounts.

Answer 6

A statment savings usually pays about .5% - .25% interest...a money market pays significanlty more. Usually money markets are a good option if you don't need a lot of liquidity, but you need some. With a standard money market you usually need a high average balance per month and they usually only let you have (on average) 3 checks or withdrawls per month. Some banks are catching on and letting you have more, but you will have to shop around for that.

I would recomend having a checking, statment savings and a money market...keep a couple of hundered dollars in the statment savings and the rest in the money market