Having an emergency fund is often considered one of the most important parts of a healthy financial plan. When it comes to opening an emergency fund account, money market accounts and savings accounts may both be good places to save money depending on how quickly you need to access the funds in an emergency.
There are, however, key differences between them.
Money Market Account vs. Savings Account
Both accounts are generally considered to be "low risk" places to save money. Like a savings account, money market accounts are interest-bearing deposit accounts with a bank.
One key difference between these accounts is how you can withdraw money from them. At Ally Bank for example, our Online Savings Account may have a higher annual percentage yield (APY) than our Money Market Account, something you can always check on our website.
The Ally Bank Money Market Account by contrast has greater flexibility with how you can make withdrawals from the account. With it, you can withdraw money by online electronic funds transfer, telephone transfer, check, debit card point-of-sale transactions and by ATM.
It's important to note, however, Money Market Accounts are subject to limits on certain check and other debit transactions. You can only make six withdrawal transactions — including electronic fund transfers and telephone transfers, checks, and debit card purchases — per statement cycle. Fortunately, deposits and ATM withdrawals are unlimited.
Your Emergency Fund Account and Money Market Accounts
For most people, emergency funds are used for unpredictable situations that require quick access to money. For that reason, it can be important to make sure that your emergency fund is in an account that you can access quickly and through a variety of means.
If you're starting an emergency fund account, money market accounts can be a good choice because of how many different ways you can access money from them.
At Ally Bank, we make opening and managing your money market account simple and straightforward. There's no minimum to open your money market account, and there are no monthly maintenance fees. Plus, your debit card and first 50 standard checks are free. And deposits in the Ally Bank Money Market Account are FDIC insured up the maximum amount allowed by law.
If you have additional questions about the Ally Bank Money Market Account, or if you'd like to find out how to open an account, you can reach us 24/7 via email or chat on our website at Allybank.com or by phone at 877-247-ALLY (2559).