If you have extra funds each month after paying for bills and other necessities, you are probably looking for a way to earn some interest on that money. As you research your options, you probably are looking for an account with the highest annual percentage yield. But although interest is important, it's not the only thing worth your consideration.
Money market account vs. savings account or interest checking
Between these three types of accounts, your choice about where to park your funds depends mostly on how often you plan to access the money.
- Checking accounts can pay interest on deposits, but not all checking accounts do. Checking accounts tend to work best when you will be drawing on funds relatively frequently.
- Savings accounts pay interest on deposits and you usually can make as many deposits as you want. You usually can't write checks on a savings account, but you can withdraw and transfer funds within federal transaction limits.
- Money market accounts pay interest on deposits, too. You usually can write checks and access funds with a debit card, as well. You can withdraw and transfer funds in these accounts within federal transaction limits.
What about interest rates?
All three types of accounts usually offer variable interest rates, so it's important to choose a bank that pays consistently competitive rates to help your savings grow faster. Online banks tend to pay higher rates because they don't have the overhead costs of traditional brick-and-mortar banks. In fact, according to Bankrate.com, Ally Bank offers among the most consistently competitive rates in the country.
Ally Bank is committed to making saving as simple, secure and rewarding as it can be. You can open and fund an Ally Bank Money Market Account, Online Savings Account or Interest Checking Account with any amount and your funds are insured by the FDIC up to the maximum amount allowed by law. Learn more at Ally.com or call live, 24/7 customer care at 877-247-ALLY (2559).