Having an emergency fund often is considered one of the most important parts of a healthy financial plan. When it comes to opening an emergency fund account, both money market and savings accounts can be good places to save. There are, however, key differences between them.
Money Market Account vs. Savings Account
Like a savings account, a money market account is an interest-bearing deposit account with a bank. Both are considered to be “low risk” places to save money. One key difference between these accounts is how you make withdrawals. Federal law limits checks and certain types of withdrawals and transfers from money market accounts to six per statement cycle. Some transactions are unlimited. You can make as many deposits as you wish. If you need access to the money in your money market account, you can make unlimited ATM withdrawals or request a check made payable to you.
Savings accounts may offer higher interest rates, but less flexibility when it comes to accessing your funds. The Ally Bank Online Savings Account, for example, may have a higher annual percentage yield (APY) than our Money Market Account, but the savings account doesn’t come with debit card or check access.
Your Emergency Fund Account
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 your emergency fund is in an account 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. At Ally Bank, we make opening and managing your money market account simple and straightforward. There's no minimum deposit to open and there are no monthly maintenance fees. Plus, your debit card and first 50 standard checks are free. And all deposits in the Ally Bank Money Market Account are FDIC-insured up the maximum amount allowed by law.
Learn more about the Ally Bank Money Market Account by visiting Allybank.com or call live, 24/7 customer support at 877-247-ALLY (2559) today.