Savings accounts and money market accounts are popular categories of bank accounts in India that help customers grow their savings. Which one should you choose? Read on to decide for yourself!
What are savings accounts, and what are their key benefits?
A savings account helps individuals save their money while helping them earn a modest interest rate. Most scheduled banks in India offer savings accounts with debit cards and mobile banking services, helping customers access their savings accounts online. You can also opt for a no minimum balance savings account that can be opened with zero bank balance. Here are the main advantages of savings accounts:
- Savings accounts have low or no minimum balance requirements from the customer.
- You can easily withdraw your funds from a savings account.
- Depositing your money in a savings account can help you grow your savings thanks to moderate interest earnings.
Understanding the functioning and benefits of money market accounts:
Money market accounts are avenues unique to the USA and are not available in India. These accounts share some features with savings accounts but offer other distinct advantages. They are insured by the FDIC (federal deposit insurance corporation) or NCUA (national credit union administration) and constitute a hybrid category of bank account that combines the benefits of savings and checking accounts.
Differences between savings accounts and money market accounts
Here are the major differences between savings and money market accounts:
- Both accounts offer different interest rates: Money market accounts generally offer higher savings account interest rates compared to regular savings accounts. However, a high-yield savings account’s interest rate often surpasses the interest rates offered by money market accounts.
- The accessibility offered by both accounts is slightly different: A mobile banking app offers the benefit of high accessibility to an online savings account. Savings accounts generally limit your number of monthly transactions. Money market accounts, on the other hand, offer higher flexibility.
- Both accounts define different minimum balance requirements: Certain categories of savings accounts do not have any minimum balance requirement. Money market accounts, on the other hand, have a higher minimum balance requirement.
To sum up
Though financial institutions in India do not offer a money market account, it is still crucial for you to consider parameters like interest rate, minimum balance requirement, ease of access to banking facilities, etc when selecting a savings bank account to grow your wealth.
It is, therefore, a prudent habit to compare interest rates and savings account perks offered by different banks before opting for an account to aid your financial journey.