What Is The Difference Between A Savings Account And An MMA (Money Market Account)?
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Sorry I’m behind on a few of the readers requests, it has been a busy month for sure! But this was a fairly straight forward answer to Ben.
Hi Hank – You have posted a few times about the high yield savings and Money Market Accounts – sorry to sound like a noobie, but what is the difference between a Money Market Account (MMA) and a savings account? – Ben from Iowa
Hey Ben – Money Market Accounts (MMA) and a savings accounts are both just products that a bank offers, like a store offers carrots and peas. The accounts are deposit accounts held with a financial institution. FDIC or NCUSIF insured deposits are backed by the full faith and credit of the United States government.
The difference between the two types of accounts is that withdrawals from a Money Market Account may be limited to “x” per month. Check with your MMA issuer for this exact number, but it usually falls at 6 per month. Whereas, on the other hand, savings accounts typically do not limit the number of withdrawals. That’s the only difference – The next thing would be to check the APY of the account you’d be opening.
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[...] the very least, put it in a high-yield savings or MMA account. I’m still getting a decent 3.30% from WAMU right now even when times are fairly tough. [...]
[...] on what you’re using that 20k for that is in The States, I’d assume it is in a high-yield savings or MMA at 3.5% and that isn’t bad, depending on what you’re saving for and your risk [...]
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Great information. Don’t MMA’s usually also have a much higher minimum balance ?
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What does the bank do with the money you give them? I assume something is different on their end. And is the interest rate changing or locked in?
Are MMA safe these days with all the bank failures? I know that they back the money with the FDIC. What happens if the bank does go down? What would you have to do?
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Most all MMA’s have minimums. Whats the least you have seen?
Robert’s last blog post..Feds likely rate cut-Spend on Credit!
@great savings tips – some do – check out Bankrate.com to see which have what rates, but really, I’ve seen good rates with a variety of minimums.
@Peter Monroe – They take your money and give it to someone else at a higher rate; that’s one of the ways that make money too.
(Insert mortgage rate here). 
@Rob – Unless you’ve got 100k in a bank, you don’t have much to worry about, I recall reading something that the government bumped it up to 250k, but it is still safe, may take a bit more time to get it back, but the government doesn’t want to get the reputation of sticking it to folks.
@Robert – I’ve seen good rates with $1 minimum balances.
Great little post! It’s good you’re letting us readers know the difference between these two accounts. I myself have always heard of the two but didn’t know exact differences like the amount of withdrawals that you are allowed per month.
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I always prefer money market accounts but you have to check what are the details.
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Here’s a bit more information on the difference between the two types of accounts:
http://www.bestcashcow.com/savings_-_checking_-_cds/article/shane_adam_yellin/savings-accounts-vs-money-market-deposit-accounts
There is obviously a lot to know about this. I think you made some good points in Features also. Keep working ,great job!
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I think you need both accounts to diversify.