John is a freelance editor on Newsweek’s private finance team. She has written articles on private finance for media outlets such as Forbes Advisor, Investopedia, Bankrate, USA Today Blueprint, Capital One, Experian, and NJ. com. John, founded in Austin, Texas, is the simplified guide to content marketing.
Zina Kumok has been freelancing in private finance for about 10 years. A journalist by training, he has covered everything from homicide trials to the Final Four. He paid off his student loans in three years and chronicled his adventure on his blog. Conscious coins.
Editor’s note: The views expressed here are those of the author and not those of any bank, credit card issuer, hotel, airline, or any other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included in the publication.
The banking experts at Newsweek Vault have gone through many hours of study to give you the latest data on your banking options. Whether you’re opening a new checking account or a savings account, our studies cover all the major banks, credit unions, and online banks. brick and mortar branches.
A cash market account can make it easier to dispose of your money, while a savings account can be a simpler way to deposit your money.
Expert take: It’s worth considering a money market account if you’re in the market for a financial vehicle that combines the interest-bearing aspect of a savings account with the check-writing capabilities of a checking account. Another plus: The account may provide a debit card. On the flip side, a savings account may be the right choice if you’re not interested in check-writing yet still want to earn interest.
A cash market account provides easier access to your cash than a savings account. However, this may come with stricter minimum balance requirements.
While popular savings accounts offer ridiculously low interest rates, high-yield savings accounts have interest rates comparable to cash market accounts, but you probably can’t write checks.
A cash market account is a cross between a checking account and a savings account. These accounts, available at banks and credit unions, pay higher interest than popular savings accounts, but may restrict some transactions.
A savings account, meant to set aside money you don’t need right away, offers more flexibility in terms of transactions than a cash market account. Money deposited in a traditional savings account earns interest, but the rate may be lower than a cash market account. High-yield savings accounts have rates comparable to cash market accounts.
If you need easy access to your cash, you can opt for a cash market account instead of a savings account. This is because a cash market account allows you to write checks and make ATM withdrawals, unlike a savings account. However, keep in mind that a cash market account may require a higher minimum balance of $2,500 or more.
If you’re not interested in writing checks and only need to deposit cash into an interest-bearing account with no minimum balance requirement, you may need to opt for a savings account. One downside: A savings account may offer a lower interest rate.
A cash market account can be attractive for someone to have greater access to their cash. However, the number of monthly transactions is likely to be limited.
A savings account may appeal to someone who rarely requires a minimum deposit or minimum balance. This may not be the ideal option for an investor who needs fewer barriers to accessing their money.
Here are four of the main differences between a market account and a savings account:
After learning about the pros and cons of the cash market and savings accounts, you may find that neither is right for you. Therefore, you may need to choose whether:
Here are some of the factors you should weigh when comparing money market accounts and savings accounts.
In addition to interest rates and other factors, you take a close look at any monetary establishment where you plan to deposit money. After all, you don’t need to do business with a bank or credit union that you’re not happy with.
When opting for a monetary institution, ask these questions:
Before depositing cash into a savings or cash market account, make sure the monetary establishment is a member of the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA).
Both organizations insure bank deposits (FDIC) and credit union deposits (NCUAs) up to a certain amount. The limit is $250,000 per account owner, per insured financial institution, per account holder category. Both types of insurance cover savings accounts and cash market accounts.
Before you create an account, read the fine print about the monetary institution’s fees. Some of the fees to look out for include:
The more fees an account charges, the more money it is likely to lose. Look for accounts that charge no fees or have as little fee as possible to avoid handing over your cash unnecessarily.
Are you interested in a bank or credit union with a strong digital presence? If so, take a financial institution’s website and app for a test drive before you open an account.
What happens if the app or not meets your standards?Look for a monetary establishment that is digitally savvy. It can simply be a classic establishment with up-to-date generation or an online-only establishment that invests a lot of money in generation. .
Typically, the money you set aside in a savings account or cash market account helps you reach your long-term goals. These include making a down payment on a home, building an emergency fund, paying for a child’s school education, or covering the charge of a major purchase.
A monetary establishment would possibly require a minimum deposit for a new account as low as, say, $25. However, some banks and credit unions do not require a minimum deposit.
Some, but all, cash market accounts allow you to write checks.
The number of times per month you can write checks, withdraw cash, or use a debit card or ATM may be more limited with a cash market account than with a checking account.
The annual percentage yield (APY) of an account reflects the annual rate of return of the interest rate and compound interest. Compound interest is the amount of interest you earn on your deposits and the accumulated interest.
Generally, the money you set aside in a savings or money market account helps achieve long-term goals. These include coming up with a down payment for a home, creating an emergency fund, paying for a childu2019s college education or covering the cost of a major purchase.
A monetary establishment would possibly require a minimum deposit for a new account as low as, say, $25. However, some banks and credit unions do not require a minimum deposit.
Some, but all, cash market accounts allow you to write checks.
The number of times per month you can write checks, withdraw cash, or use a debit card or ATM might be more limited with a cash market account than with a checking account.
An accountu2019s annual percentage yield (APY) reflects the yearly rate of return based on the interest rate along with compound interest. Compound interest is the amount of interest you earn on your deposits and accumulated interest.
John is a freelance editor on Newsweek’s private finance team. She has written articles on private finance for media outlets such as Forbes Advisor, Investopedia, Bankrate, USA Today Blueprint, Capital One, Experian, and NJ. com. John, founded in Austin, Texas, is the simplified guide to content marketing.