Do you know the difference between a Money Market Account or a Checking Account? How can you check which one suits you best? Take a look at these tips!
If you are thinking about opening a new bank account, you should consider your options. Should you open a money market account or a checking account?
Before you make your decision, you should learn the advantages and disadvantages each type of account has and figure out how you will be using your money.
First, let's check what each account can offer:
- Checking account: This type of account allows you to write checks and grants you a debit card to make purchases and withdraw money from your account. It's usually used to manage monthly incomes and daily expenses. The downside is that it earns little to no interest.
- Money market account: This type is mostly used as a savings vehicle, as you can earn high interest on your balance. This is the main difference with checking accounts. You can include this account as a way to manage your savings. Money Market accounts also allow cash withdrawals from an ATM, however, they offer limited amounts of withdrawals per month. You can use a debit card or checks as a way to access the money in your account.
When to choose a Checking account
- When you want to have regular access to your funds to pay day-to-day expenses.
- To earn rewards. Some checking accounts allow you to earn cashback from your purchases with debit cards.
- You want stress-free deposits and withdrawals.
When to choose a Money Market account
- When you want to earn interest.
- To destine short-term savings to another bank account.
- You seek an account to fund your overdraft protection.