Money market accounts are a type of savings account, but they have checking account features. They also offer you the ability to write a check or use a debit card for purchases. However, banks might also charge you a penalty for making too many withdrawals, such as more than six.
Being able to use a check or debit card to access your savings is convenient, especially in emergency situations, when you need cash fast.
If you are saving for a special purchase, you can use your debit card or a check to buy the item directly from the account.
For instance, a self-employed contractor might put funds to pay their taxes in a money market account. They need to deposit funds routinely but only withdraw for taxes four times a year.
The money market account allows them to set up direct payments while accumulating significantly more interest than a checking account.
A money market account may have a higher opening deposit requirement than a savings account. Likewise, they usually have a higher balance requirement.
You should look into the best high-yield savings account providers if:
· You can meet the minimum deposit requirement.
· You can maintain the minimum balance.
· You want to accumulate more interest than regular savings accounts.
· You need easy access to your funds via check or debit card.
· You need to make withdrawals but not often. The highest money market rates are better than those for savings accounts. Banks often set up tier rates, which give accounts with higher balances higher interest rates. For example, an account with more than $100,000 could have an interest rate of 1.5 percent.