Money market accounts are a little different from high-yield savings accounts, but both are great savings tools

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  • A money market account isn't much different than a high-yield savings account.
  • Both money market and high-yield savings accounts earn significantly higher interest rates than traditional checking or savings accounts, while keeping your money accessible and federally insured.
  • Both types of accounts limit withdrawals and transfers to six times per statement cycle.
  • Some money market accounts come with a debit card and check-writing capabilities, and they often also have higher minimum balance requirements to earn the top interest rate.
  • Click here to learn about Business Insider's picks for the best money market accounts »

Money market accounts, like high-yield savings accounts, are a popular and expert-recommended vehicle for storing cash you'll need in the short-term.

In fact, there's no real difference in the function of money market and high-yield savings accounts, according to financial adviser Ric Edelman. "It's merely marketing schtick," he told Business Insider.

What is a money market account?

Both types of accounts typically come with low or zero monthly fees; relatively high interest rates; are FDIC insured up to $250,000; and are smart options for storing savings you want to grow, but also keep safe and easily accessible. Money market accounts are not to be confused with money market funds, which are a type of low-risk investment.

Regardless of the bank or credit union, both money market and high-yield savings accounts are subject to the federally mandated limit of six withdrawals or transfers per statement cycle, which includes bill pay, transfers to another bank account, cash withdrawals, and, for some money market accounts, debit purchases and checks. However, some institutions are waiving this limit during the coronavirus pandemic.

The clearest difference between the two types of accounts is the debit card and check-writing capabilities that come with some money market accounts. High-yield savings accounts can only be accessed online or through a bank branch.

Should you choose a money market account or a high-yield savings account?

You'll probably prefer a money market account if you want easier access to your savings. Unlike savings accounts, money market accounts typically come with paper checks or a debit card. (Or both!) This can be especially useful for storing your emergency fund, because you can have instant access to your cash, instead of waiting for money to transfer from a savings account to another account.

You might choose a high-yield savings account if you don't have much money to get started. Most online high-yield savings accounts don't have any minimum opening deposit requirement. But many money market accounts ask for hundreds or even thousands to open an account. 

There are a few money market accounts out there that don't require much to get started, though. So if you're dead set on getting paper checks or a debit card but don't have money for a big opening deposit, don't throw in the towel just yet.

Your choice may come down to how much each account pays in interest. However, it's important to remember that rates can fluctuate after you open an account, so the rate probably shouldn't be the only reason you choose one account over another.

And remember — you don't necessarily have to choose between one or the other. There's nothing stopping you from opening both a money market account and a high-yield savings account if you want to. They're both strong savings tools.

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