If you’re looking for good ways to make your money go further, finding the perfect place to save it could be one answer. However, although the solution is a simple one, the search might not be, and you need to be sure that you’re picking precisely the right option for you and your money. 

There are two main choices when it comes to savings. One is money markets, and the other is traditional savings accounts. But what are the differences, and which is better? Let’s look more closely at each and work out which choice is best for you. 

What Are These Accounts? 

The first question to answer that will help you get a better idea of which direction to go in is what are money market and what are savings accounts? Knowing what each is and the differences between them is useful, otherwise you’ll just be choosing an option randomly, and it might not be the one that’s going to give you the best return. 

A savings account is something you’ve probably already heard of, and you might even have one set up. It’s an account where you can put any money you want to save and where it will accumulate interest over time. How much interest depends on the individual account, but you can find high-yield savings accounts that offer a lot more than standard ones, so it’s wise to shop around. Most of the time, you’ll be able to access your money whenever you want when it’s in one of these savings accounts. 

Money markets do a similar job, but they’ll very often have higher interest rates than traditional savings accounts. On top of that, you’ll be able to access your money via a check or debit card, which isn’t usually something you can do with a savings account. There are other benefits to money markets as well, which we’ll go through shortly. 

Money Markets vs. Savings Accounts 

Now you know what each of these types of accounts is, we’ll take a look at the pros and cons and how they match up to give you a fuller picture. Remember, there’s no right or wrong when it comes to choosing where to put your savings, and that’s why you need to choose yourself, rather than rely on someone else. 

Minimum Balance Requirement 

In a lot of cases, when you open a savings account, you won’t be required to deposit a minimum amount of money to keep it open – if you don’t have anything to put in it right away or you withdraw everything at one point, your account won’t be closed, and you won’t suffer any penalties. 

Money markets, however, do usually operate a minimum balance requirement, and it can be anything from one hundred dollars to thousands – it all depends on the money market you’ve chosen. 

Debit Card Use 

The money in a savings account is generally tucked away where you can’t easily get to it. That’s not to say you can’t access it at all (although some savings accounts do have a maximum withdrawal limit, which is excellent if you don’t want to be tempted to use the money), but it would involve transferring the money from the savings account to your checking or current account and then using your debit card or writing a check to spend the money. There’s a definite procedure involved, and that’s useful; you need to think about what you’re doing, and it gives you the chance to decide whether spending your savings is really what you want to do. 

Money markets don’t work in the same way, and there is no procedure. If you want to spend the money, you can use a debit card linked to the account – or sometimes write a check – and that’s it; you’ve spent it. There are no additional checks and balances to go through. Although that’s great when it comes to easy access to your money, it does mean the temptation is always there to spend it. 

Which Is Better? 

As we said above, the choice about where to save your money is down to you, and if you want to keep it in your mattress so you know where it is at all times, that’s your choice. It’s not recommended, though; it’s not safe, and you won’t earn any interest, so your money won’t do any work for you. 

That’s why so many people want to make the choice between savings accounts and money markets. There are pros and cons to each, but if you want easy access to your cash, money markets work best. If you prefer to steer clear of temptation, on the other hand, a savings account fits the bill.