Money Market Vs. Checking

A traditional checking account allows you to pay the bills -- but your money isn't working for you. A money market account allows you to earn interest on the money -- but unfortunately, choosing the best account isn't as simple as choosing the one that pays you money. You need to carefully compare several factors to see which account is best for you.

Interest Rates

Most traditional checking accounts do not pay interest on the money in your account, though some banks are starting to offer low interest rates on certain types of accounts. A money market account does pay interest on the money that you hold in your account. The interest rates are generally higher than with savings accounts, but lower than the rates you might get from investing in the stock market long-term.

Minimum Balances

Money market accounts require you to maintain a minimum balance. Usually, the higher the minimum balance requirement, the higher the interest rate the bank will pay you. Expect around a $2,000 minimum balance. A checking account usually does not have a minimum balance, though maintaining a specified minimum balance may waive your monthly fee.


Fees vary widely from bank to bank. Even within your bank, there are different fees associated with each account. Both types of accounts will typically charge you a fee if your balance dips below the minimum balance. Read through all documentation to see which types of accounts have the lowest fees at the bank you choose.


A money market account restricts the number of withdrawals that you make each month. If you go over this amount, you'll have to pay a fee each time.

Selecting the Best One For You

A money market account may be a smart move if you make few transactions each month and don't mind maintaining the higher minimum balance. Checking accounts are more accessible to the average consumer and work well if you want to use your debit card in stores, or put your money in other types of investment vehicles that may have higher interest yields.

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