Savings vs. money market accounts
A crucial difference between a money market account and a savings account is the way you can access your funds. Money market accounts offer a debit or ATM card and the ability to write checks. Savings accounts generally don't. Some financial institutions offer savings account holders an ATM card, but it's not that common.
Another difference is the minimum deposit requirement. Savings accounts typically require lower minimum balances and initial deposit amounts. That's not to say that all money market accounts require high deposits, but many do -- we're talking about a few hundred to several thousand dollars to qualify for the best rates. In return, you can usually earn much better APYs compared to those of savings accounts.
Otherwise, both savings accounts and money market accounts offer similar features. Both types of accounts are FDIC or NCUA insured, meaning your cash is protected up to $250,000 in the event your bank or credit union goes belly up. And you'll find the same transaction restrictions on savings accounts and MMAs.
It's important to consider how you want to use your new bank account before opening one. For instance, if you only have a small amount of money you want to keep in savings, then a money market account may not be for you. That's especially true if you can't meet the minimum opening deposit requirements.
However, if you can afford it and are after the best rates, then a money market account may be your best choice. Plus, money market accounts usually make it easier for you to get at your money. That may be useful, for example, if it's where you are keeping your emergency fund. What if you're the type of person who would be tempted by easier access to your cash? Then, a savings account -- with its lack of ATM and check-writing access -- may be the smarter choice.