Money Market vs. High-Yield Savings: Which Is Better?

When choosing an account to stash your savings, you’ve got options. Two options include deposit accounts like money market accounts (MMAs) and high-yield savings accounts (HYSAs.)

While both accounts can help expand your savings, they have their differences.

Money market vs. savings: Quick glance

	Money market	Traditional savings
Best for	Those who want checks, a debit card and flexible access to their money while they save.	Those who want an account with little to no minimum deposit or monthly balance requirements.
Check writing	Yes	No
ATM access	Yes	Varies by account
FDIC or NCUA insurance	Yes	Yes
Minimum deposit	$1,000+	$0–$1,000
Six-transaction limit	Yes	Yes

What is a money market account?

A money market account is a deposit account that is often considered a hybrid between a checking and a savings. MMAs have attributes of both bank accounts — namely, they typically pay higher APYs like a savings account, but with the bonus of having easier access to your money.

With MMAs, you can often use a debit card or write a check, unlike with savings accounts. Know that even though you have the flexibility to withdraw, banks may still limit you to six withdrawals per month.

MMAs are also insured under the FDIC up to $250,000 per depositor, per institution, per ownership category. The average money market rates are currently at 0.64%, but the best money market accounts can pay as much as 5.2% APY.⁽¹⁾

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Quontic Bank Money Market

Quontic bank offers a high 5.00% APY with no monthly or overdraft fees.

• 5.00% APY
• Interest compounds daily
• $0 monthly fee

What is a high-yield savings?

High-yield savings accounts are another solid deposit account to store your savings. HYSAs, as the name suggests, are savings accounts that offer depositors higher interest rates than standard savings.

The average for regular savings accounts is currently 0.46%, while the best high-yield savings accounts can pay up to 5.00% — similar to money markets. ⁽¹⁾

High-yield savings accounts also offer deposit insurance through the FDIC. While you can transfer or withdraw funds, your bank may limit you to six withdrawals per statement cycle.

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SoFi Checking and Savings

With SoFi Checking and Savings get paid up to two days early. Set up direct deposit to automatically get your paycheck up to two days early every time you get paid.

• Up to 4.30% APY on savings by meeting deposit requirements
• Interest compounds monthly
• $0 account or overdraft fees

Partner terms and conditions

New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus when they set up Direct Deposit of at least $1,000 during the Direct Deposit Bonus Period. Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/24. Full terms at sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.
SoFi members with Direct Deposit can earn 4.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.30% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/8/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.

SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 10/8/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.

Our account fee policy is subject to change at any time.

SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at SoFi.com/banking/fdic/terms
See list of participating banks at SoFi.com/banking/fdic/receivingbanks

We’ve partnered with Allpoint to provide you with ATM access at any of the 55,000+ ATMs within the Allpoint network. You will not be charged a fee when using an in-network ATM, however, third-party fees incurred when using out-of-network ATMs are not subject to reimbursement. SoFi’s ATM policies are subject to change at our discretion at any time.

Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

MMA vs. high-yield savings: What’s the difference?

Both MMAs and HYSAs are great choices for savings products, but they aren’t created equal.

Money markets have more spending flexibility, like a debit card for purchases and the ability to write checks.

High-yield savings accounts don’t have this flexibility, as withdrawals usually have to be made in cash or via electronic transfer (ACH). Some HYSAs may offer you an ATM card, but it isn’t the same as a debit card. ATM cards can’t be used for purchases — only to check your balance or withdraw cash via ATMs.

Additionally, MMAs often have higher minimum balance requirements and tiered interest rate schedules. These features mean your interest rate may fluctuate depending on the balance in the account. You also may be subject to paying minimum balance fees if you fall below the required balance.

High-yield savings usually have lower balance requirements, if any at all. They also have few fees overall.

When an MMA makes sense

Money markets can be a solid option, but they may not fit all situations. They make the most sense when:

• You want a higher interest rate. MMAs typically pay higher rates than checking and traditional savings accounts.
• You want easier access to your savings. Checkwriting privileges and debit cards make MMAs more liquid than traditional savings accounts.
• You have a large sum to deposit. MMAs typically have higher minimum balance requirements than savings to earn the most interest and avoid fees.

When a HYSA makes sense

High-yield savings accounts are a popular choice, but they make more sense than a money market account when:

• You won’t need immediate spending access to your funds. Usually, you’ll have to withdraw via cash or bank transfer to get your money.
• You have short-term savings goals. The interest rates in HYSAs typically won’t change depending on the deposit amount, making HYSAs ideal for fluctuating balances.
• You want a savings product without fees. Most HYSAs do not have account minimums, so no account minimum fees.

Alternatives to MMAs and HYSAs

We’ve established that both MMAs and HYSAs have their perks. But in case they aren’t for you, here are some alternative savings and investment options.

• Cash management accounts. A product combining checking, savings, and investment accounts, cash management accounts usually earn interest and offer check-writing, a debit card, or both.
• Interest-bearing checking. There are interest-bearing checking accounts, though the rate is often lower than what you get with a savings account or MMA.
• Certificates of deposit (CDS). Another type of deposit account, CDs are fixed-term, locked deposit accounts that pay a fixed rate.
• Stocks. Ownership shares in a company that grows and provides a portion of its profits to you.
• Bonds. Investor-provided loans to a company, where the investor earns interest in exchange.
• Treasury bond. Long-term, low-risk loans issued by the government that pay a fixed interest rate.

Bottom line

At the end of the day, both accounts are great options for achieving your savings goals.

Money market accounts and high-yield savings accounts are great savings accounts, offering a safe place to store and insure your funds and earn interest at the same time.

If you have a large sum or need the ability to withdraw your funds quickly for purchases, an MMA may be your best bet. But, if you want the flexibility of lower fees and balance requirements and don’t need your savings immediately, you might consider a HYSA.