Money Market Accounts vs. Savings Accounts | HomeStreet Bank

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Money Market
vs. Savings Accounts

Written by Maggie McKelvy,
North Seattle District Manager

Navigating through choices for bank deposit accounts can be a daunting task. There are many options available and each type of account can help you reach different financial goals. If saving is your goal, two accounts you could consider are savings accounts and money market accounts. Before determining the benefits of money markets vs. savings accounts, there are a handful of questions you should ask yourself first. The good news is that representative at your local HomeStreet Bank branch can help you to navigate these many choices to find the best account for your needs.

What is the account being used for?

As you prepare to visit the bank, the first question to ask yourself is “what is this money intended for?”  Is this a rainy day fund? Is this money set to pay monthly bills? Is this my “fun money” to be used for travel or for dinners out etc.? Sharing the answer to this question with your banker is a great first step and will help you determine what kind of account you would like to open and will help you weigh the benefits of a savings account vs. a money market account.

What are the primary differences between a money market account and a savings account?

Both Money Market and Savings accounts are safe, reliable deposit accounts that are FDIC insured and pay interest on funds deposited. Both account types are great vehicles for setting aside funds while maintaining accessibility. Savings accounts are perfect for depositors who maintain balances of less than $1,000 and who are comfortable accessing funds via the ATM or with a bank teller. For depositors who maintain balances above $1,000, a Money Market account is a better solution, since there is opportunity to earn a higher interest rate. Like savings accounts, Money Market account interest rates are subject to change and are updated weekly, so make sure you’re staying up to date with current rates.

What are the main benefits of a Money Market account?

Like savings accounts, Money Market accounts are a safe place to deposit funds. They offer a higher interest rate on deposits and sometimes feature tiered interest rates – greater returns for larger deposit amounts. Like Savings accounts, Money Market account funds are easily accessed and these accounts can be utilized for overdraft protection.

Our HomeStreet Bank Money Market Accounts provide tiered rates for higher balances, the ability to write checks, use the account as overdraft protection for your personal checking account and allow you to manage your account 24/7 with free online and mobile banking.

How accessible are the funds in a Money Market account?

Money Market accounts provide the same access to funds as savings accounts and are subject to the same regulatory restrictions on certain types of withdrawals. There is one additional access option for customers with Money Market accounts, namely check access. Per federal regulation, Money Market account holders can make up to 6 withdrawals per month via telephone, automated transfers, ACH, pre-authorized transfers, online banking or by writing checks on the account. In other words, Money Market accounts accommodate the occasional need to access via check, but they are not intended as a substitute for a checking account. There are no limits to withdrawals made in person, at an ATM, by messenger or by mail.

Interested in a HomeStreet Bank money market account?

What are the benefits of a savings account?

There are many reasons to set money aside in an interest earning bank account.  Savings accounts are typically used for funds that are not intended for daily expenses.  Savings accounts are a familiar account type and, for many, the first type of bank account that we open as children. These accounts provide a friendly and safe resource to account holders who anticipate modest balances in their account, typically less than $1,000.  

Savings accounts are also a great vehicle for setting aside funds for a specific purpose, for small rainy day funds or for beginning a savings plan. Some depositors also utilize these accounts as overdraft protection for their Checking accounts. There are some regulatory limits to how often this can be utilized and there may be a small transfer fee associated with transferring the funds, but that fee is a fraction of the cost of overdraft fees. 

Additionally, HomeStreet Statement Savings Accounts allow you to manage your accounts 24/7 at the tips of your fingers with free online and mobile banking, receive important account alerts by email or text, and give you access to personal banking representatives.

What are the requirements of opening a savings account?

The minimum opening deposit requirement for savings accounts is usually around $100, with lower requirements for children. Don’t want to pay fees? Savings accounts generally have a low minimum balance requirement to avoid a monthly fee and often do not charge a fee for a child’s account. 

Are savings accounts safe? What are saving accounts interest rates?

Bank Savings accounts are FDIC insured and pay more interest on the funds deposited than most Checking accounts. Interest rates can change at any time and are typically updated weekly, so make sure you stay up to date with current rates. In a rising rate environment, this means that interest rates could rise and account holders could see a greater return on their deposits. Savings account holders enjoy peace of mind because FDIC insurance protects Savings accounts from risk. 

How accessible are the funds in a savings account?

To access funds in savings accounts, the account holder can visit a bank teller or an ATM as many times as they like each month.  Additionally, there is no limit to withdrawals made by messenger or by mail.  Per Federal Regulation, there is, however, a limit to the number of withdrawals conducted by telephone, automated transfers, ACH (automated clearing house), pre-authorized transfers or online banking. This limit is 6 withdrawals per month.  

Interested in a HomeStreet Bank savings account?


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