Saving money: Choosing between a savings and money market account

You’ve heard of savings accounts and money market accounts. Which one should you choose?

Savings accounts are great for when you want to put away your money but still want relatively easy access. It’s not a checking account — that’s used for everyday transactions. The idea is to save your money. And keep it in the account. That means you get a higher interest rate than you do with checking accounts.

Money market accounts are similar and are generally considered a type of savings account. However, the interest rate is usually a little higher, meaning it may be a better place to park your money.

But here’s the catch — money market accounts often require higher minimum balances and deposits – something like $5,000, $10,000 or even $25,000.

The most important things to do when picking an account is to look at the interest rate you’ll be getting, and note any restrictions on the account — including minimum deposits and your ability to remove funds.

Also, be aware of any fees. One charge could wipe out your interest payments for a month, or even more.

Getting interest on your money can really add up over time. And it’s always good to put some money away for that rainy day.

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