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Kazakhstan Allows Registered Crypto Exchanges To Open Accounts At Local Banks

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Kazakhstan Allows Registered Crypto Exchanges To Open Accounts At Local Banks

Government officials in Kazakhstan have approved regulations that will govern interactions between authorized coin trading platforms and traditional financial institutions. The new rules will allow registered cryptocurrency exchanges to have bank accounts in the country.

Pilot Project to Develop Kazakhstan Into Regional Crypto Hub

Regulations allowing crypto exchanges registered at the Astana International Financial Center (AIFC) to be serviced by second-tier banks in Kazakhstan have been adopted by a working group comprised of representatives of the Ministry of Digital Development, the central bank, financial regulators, as well as members of the financial and digital asset sectors, the ministry announced.

The initiative is part of a project aimed at introducing a regulatory framework that will facilitate the development of Kazakhstan’s potential as a regional crypto hub. It will be implemented as a pilot throughout 2022 with the participation of crypto trading platforms licensed by the AIFC Financial Services Authority (AFSA), a press release detailed.

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Kazakhstan attracted cryptocurrency miners when China cracked down on the industry in May last year. According to Digital Development Minister Bagdat Musin, however, the crypto industry is not only mining but also includes crypto exchanges, digital wallets, and other blockchain platforms. The high-ranking government official elaborated:

It is like other industries, which can and should work for the benefit of our economy. We must make money on crypto exchange — this is the next level of development of financial technologies.

Musin insisted that the Central Asian nation needs to create a full-fledged ecosystem so that the digital assets extracted using Kazakhstan’s electricity are traded on local exchanges and the respective income remains in the country.

The Digital Ministry emphasized that the pilot project will allow the regulated trading of digital currencies, which will ensure proper protection for both retail and professional investors. If its implementation is successful, the authorities in Nur-Sultan plan to introduce amendments to the country’s legislation and the acts governing the AIFC.

The AIFC Financial Services Regulatory Committee is now the only body overseeing activities of fintech firms in Kazakhstan, AFSA Director Nurkhat Kushimov pointed out. All entities applying for a license are thoroughly checked and supervised, he stressed. “Our goal is to create an environment in which only trustworthy and stable companies that enjoy the trust of customers would operate,” the official stated.

The positive development for the local crypto industry comes after a recent statement by the National Bank of Kazakhstan which announced it’s closely following the market while noting it’s too early to talk about legalization of cryptocurrencies. At the same time, the monetary authority said it intends to capitalize on the potential for innovation that crypto technologies offer.

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Do you expect Kazakhstan to adopt more crypto-friendly regulations in the future? Tell us in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Wechat To Prohibit Accounts From Providing Some NFT And Crypto Services

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Wechat To Prohibit Accounts From Providing Some NFT And Crypto Services

Tencent’s Wechat intends to impose penalties on public accounts facilitating secondary trading of NFTs, a press report has revealed. Accounts offering transaction channels and guidance for cryptocurrencies have also been targeted by the new rule.

Popular Chinese App to Impose Restrictions on NFT Trading

Wechat, the instant messaging, social media, and mobile payment app developed by the Chinese tech giant Tencent, is introducing a policy update that will prohibit the provision of certain services related to non-fungible tokens (NFTs) and cryptocurrencies on its platform.

Quoted by the South China Morning Post (SCMP), Tencent said it will “order accounts to rectify if they provide relevant services or content for secondary trading of digital collectibles, and limit some features or even ban the account.” The news comes after in April, Wechat acknowledged it had suspended some accounts linked to NFTs.

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The policy update will also introduce penalties for accounts providing transaction channels, guidance, or issuing cryptocurrencies to Wechat users. Accounts enabling initial coin offerings (ICOs) and transactions of crypto derivatives will also be affected.

The report notes that with the move, Wechat’s management is taking into account the guidelines issued by Chinese regulators earlier this year suggesting that businesses in the industry should steer clear of the financial aspect of such digital assets.

According to Wang Yinying, a Shanghai-based lawyer specializing in blockchain and Web3-related cases, “the new rule’s emphasis is on the narrative that the secondary market for trading digital collectibles might incur speculation and instability of the financial market.”

Wechat Said to Be Acting Preemptively

The legal expert was referring to joint statement issued by the National Internet Finance Association of China, China Banking Association, and the Securities Association of China in April aimed at curbing risks associated with cryptocurrencies.

“Tencent is acting preemptively to keep itself out of trouble,” commented Bao Linghao, a senior analyst at research firm Trivium China. He pointed out that currently there are no formal regulations on NFT trading yet, but emphasized that “Chinese regulators don’t like speculation of any kind, including NFTs.”

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This spring, Chinese financial institutions were asked to stay away from NFTs, and their use in a number of areas, including securities, insurance, loans, and precious metals, was banned. Experts believe the People’s Republic is likely to establish a centralized platform for secondary trading of NFTs.

Chinese digital collectibles are built on consortium blockchains, not open blockchains such as Ethereum. Additionally, the guidelines issued in April suggested that they must be bought using the Chinese yuan under real identities to avoid money laundering risks.

SCMP further quoted Wechat as saying that the accounts which display digital collectibles and primary transactions would need to have contracts with blockchain companies certified by the Cyberspace Administration of China (CAC) and refrain from supporting secondary trading.

Blockchains built by the big tech firms like Alibaba Group Holding, Tencent, Baidu, and JD.com were among the first approved by the CAC in 2019, the daily remarked, adding that since last year, consumer brands and Chinese state media have jumped on the NFT bandwagon with collectibles based on such platforms.

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What future do you expect for NFTs in China and what’s your opinion about Wechat’s new restrictions? Share your thoughts on the subject in the comments section below.

Lubomir Tassev

Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration.

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Image Credits: Shutterstock, Pixabay, Wiki Commons, Shutterstock / Boumen Japet

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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The Best Online Savings Accounts For June 2022: Take Advantage Of Rising Rates With These High Yield Accounts

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The Best Online Savings Accounts For June 2022: Take Advantage Of Rising Rates With These High Yield Accounts

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Savings account interest rates are on the rise, as the Federal Reserve continues to raise rates in its fight against runaway inflation.

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If you’re looking for a high-yield savings account with a competitive rate in today’s rising rate environment, online banks offer some of the best options. The best savings account rates available today all come from online banks, and offer 10x or more the national average savings rate. 

Online banks can offer flexibility in how you access your account, and typically have robust online banking and mobile app features. Some are even partnered with brick-and-mortar financial institutions or offer ATM access if you prefer to make transfers in-person. Online banks also have fewer overhead costs, which means they can pass on those savings to you in the form of better interest rates, lower fees, and lower minimums, experts say.  

Here’s more information about our picks for the best online savings accounts, and how you can start saving today:

Best Online Savings Accounts

Experts have consistently told us the best online savings accounts are secure, high yield savings accounts with no monthly maintenance fees and low or no minimums. Because of their flexibility, low fees and minimums, and high interest rates, all of the savings accounts on our list of the best high yield savings accounts are online accounts. 

Here’s an overview of our favorite online high yield savings accounts right now, and the annual percentage yield (APY) you can currently earn on your balance:

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Best Online Savings Account Summary

Online Bank Account Name Monthly Fees Minimum Requirement
Ally Bank Ally Bank Online Savings Account None None
American Express National Bank American Express High Yield Savings None None
Barclays Barclays Online Savings Account None Maintain at least $0.01 to earn interest
Bread Savings Bread Savings High Yield Savings Account None $100 minimum balance
Capital One Capital One 360 Performance Savings None None
CIT Bank CIT Bank Savings Connect Account None $100 minimum opening deposit
Discover Bank Discover Online Savings Account None None
Dollar Savings Direct Dollar Savings Direct Dollar Savings Account None None
Lending Club Bank Lending Club Banks High Yield Savings Account None $100 minimum opening deposit
Live Oak Bank Live Oak Bank Savings Account None  Maintain at least $0.01 to earn interest
Marcus by Goldman Sachs Marcus Online Savings Account None None
Prime Alliance Bank Prime Alliance Bank Personal Savings None None
Salem Five Direct Salem Five Direct eOne Savings None $10 minimum opening deposit
Synchrony Bank Synchrony Bank High Yield Savings None None
TAB Bank TAB Bank High Yield Savings Account None Maintain at least $1 to earn interest
UFB Direct UFB Savings None None
Varo Bank Varo Savings Account None Maintain at least $4.95 in any 31-day month and $5.12 in any 30-day month to earn interest

You can read even more about each bank on our list of best high yield savings accounts.

How Does an Online Savings Account Work?

An online savings account works like any other savings account. The biggest difference is that you may not have the option to make deposits or withdrawals in person at a bank branch.

You can open an online savings account online, and you’ll usually have a few different options for funding the account:

  • Bank transfer: This is one of the most common and seamless ways to transfer money to an online bank account. Through your online account, you can transfer money from an existing checking or savings account with any bank to your online savings account, using the account and routing numbers.
  • Mobile check deposit: If your online bank offers mobile account access, you may have the option to deposit a paper check using the mobile app. 
  • ATM deposit: Some online banks offer ATM access for deposits and withdrawals, and may even waive fees for certain ATMs. Check the terms of your account or call your online bank to find out if you have ATM access and which ATMs are compatible with your account.
  • Mail or wire transfer: Even if it doesn’t have a bank branch you can visit, your online bank may have a location to which you can send a paper check or wire transfers with the funds you’d like to add to your account. Just keep in mind, using this method will likely take much more time for your money to appear in your account than other options. 

Once your online savings account is funded, you’ll begin earning interest on the balance. Your interest may be compounded daily, weekly, or monthly, depending on the bank — you can find more about how often your online bank will compound interest in your account terms. 

Over time, you’ll be able to withdraw funds from your account as you need them, or add more money to your balance. Experts recommend setting up direct deposit automatic transfers to your savings if you’re working to build an emergency fund, so you don’t have to think about moving the money regularly.

Finally, make sure you understand any limitations your bank may have on the number of transfers you make. The Federal Reserve used to limit the number of transfers on savings accounts to six per month, but as of 2020 that rule has been lifted. However, some banks may still impose their own limits on the number of withdrawals or deposits you may make per statement cycle.

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Online Savings Accounts vs. Traditional Savings Accounts

Both an online savings account and a traditional savings account can be a solid place to keep your emergency savings or money you want to put away for short-term goals. Because both types are insured by the Federal Deposit Insurance Corporation (FDIC), they’re also among the safest places to store your cash. 

Here are a few of the major differences between the two:

Online Savings Accounts Traditional Savings Accounts
Offered by online banks or online divisions of traditional banks — may only be accessible through your online or mobile account Usually offered by traditional brick and mortar banks, usually with in-person branch access
High yield savings accounts with competitive interest rates Very low interest rates, if any at all
Generally no monthly service fees  May charge monthly service fees or require certain account activities to waive fees
Typically have low or no minimum opening deposit or minimum balance requirements More likely to have a minimum opening deposit or minimum balance requirement
Easily accessible online account and often comes with a robust mobile app  Usually has online account access, but mobile app may not have as robust features
FDIC insured FDIC insured

In general, online high yield savings accounts are a great option to keep your money safe and earn interest on your balance. Traditional bank accounts may be a good option if you prefer the convenience of an in-person transaction or your brick-and-mortar institution has other features that are more important to you — but online banks can help you earn more on your balance over time.

Can Online Savings Accounts Be High Yield?

Many online savings accounts are high yield accounts.

Online savings accounts are more likely to have high yields than traditional savings accounts from brick and mortar banks. That’s because online banks can save on many of the expensive costs it takes to run branch locations of a traditional financial institution. 

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Online banks are often the most competitive account types when it comes to APYs, and many online banks will be among the first to increase the interest rates they offer in a rising rate environment. In fact, all of the accounts on our list of best savings account rates are offered by online banks.

Requirements for Opening an Online Savings Account

Just like any savings account, you’ll need to provide some personal information when you open an online savings account. Here’s some of the info you should be prepared to enter when you apply:

  • Full name
  • Birth date — depending on the bank you choose, you may need to be at least 18 or 21 years old to open an account
  • Social Security number — some banks may also accept a tax identification number
  • Whether you’d like to open a single-owner account or joint account
  • Home address
  • Phone number and other contact information
  • The bank name, account number, and routing number of an existing bank account — you can use this account to transfer funds for your initial deposit to your online savings account. Typically, checking accounts and savings accounts are accepted.

What to Look for in an Online Savings Account

When you’re searching for an online savings account, the first thing you should do is make sure it’s insured by either the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). 

These agencies ensure consumer deposits up to $250,000 held in certain accounts, including a checking account, savings account, or money market account, among others, are insured against any bank failure. There are some differences — FDIC insurance provides separate coverage for different account categories, for example, while NCUA insurance for credit union accounts covers up a total $250,000 held in any account type at the same credit union. If your account is held at an FDIC-insured or NCUA-insured bank, you can rest assured that your money is secure.

Beyond that, there are a few details you should look for in a new online savings account, which may depending on your individual financial situation and goals:

First, make sure you know the annual percentage yield (APY) the account has. Online banks — whether they’re online-only banks or online divisions of other banks — are often some of the best places to find high yield savings accounts, since they don’t have the same overhead costs as brick-and-mortar institutions. Right now, the best online savings accounts offer 10x or more the national average interest rate, with some exceeding 1% APY.

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You’ll also want to consider any costs associated with the savings account you choose. Some banks charge monthly maintenance fees for account holders. However, there are plenty of options — especially among online banks — that are fee-free. None of the accounts on our list of best online savings accounts, for example, charge monthly maintenance fees. 

Minimum balance requirements are another thing to look for. Check whether the savings account you choose has either a minimum opening deposit requirement, or minimum balance requirement. Some online banks may require you to deposit a certain amount when you open the account, while others may require a minimum ongoing balance. In some cases, not meeting the minimum balance may result in fee charges; in other cases, you may not earn the account’s full interest rate if you have less than the minimum in your account.

On the other hand, some online savings accounts — especially those with the highest APYs — may only pay the advertised APY up to certain maximum balances. For instance, you may be able to earn a stellar 2% APY on your savings, but only on up to $500. Before opening a new account, consider how much savings you’re starting with and how much you intend to keep in your account long-term, to make sure the account you choose aligns with your goals.

Finally, you may also want to consider what other account types the online bank you open a savings account with offers. If you like the bank, or find its website or mobile app easy to use, it can be simple to keep your checking account, savings account, or any future CDs all in one place. Some online banks offer more different types of deposit accounts than others, so make sure you understand all the offerings available to you if you’re considering consolidating your accounts with one bank.

How to Open an Online Savings Account

Opening an online savings account is fairly straightforward. Once you’ve found the account that works best for your goals, you can go to that bank’s website and find the “open account” button on its savings account page. 

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You’ll need to input some personal information and more than likely a routing and account number for an existing bank account. Some information to have on hand includes your contact information, Social Security number, and and home address. 

If the account you choose has a minimum opening deposit, you’ll need to make sure you transfer at least that much from your existing account. Some online banks may offer mobile check deposit or ATM access for future transfers. 

Finally, if you plan to contribute to your savings account regularly, it’s helpful to set up automatic transfers. In fact, experts we’ve spoken to recommend this method for anyone who’s trying to build an emergency fund or other short-term savings. Decide how often you’d like to make transfers to your new savings account, and you can set up those transfers upon account opening. 

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Money Market Accounts And Savings Accounts Are Very Similar. Here’s What To Know Before You Open One

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Money Market Accounts And Savings Accounts Are Very Similar. Here’s What To Know Before You Open One

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We want to help you make more informed decisions. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. For more information, see How We Make Money.

It’s a good time to be a saver, as the Fed is expected to continue increasing interest rates — and many Americans are taking advantage.

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In fact, 60% of U.S. adults say they were able to build up their personal savings over the past two years, and 69% of that group said they plan to maintain their new savings rate in the future, according to Northwestern Mutual’s 2022 Planning and Progress Study. 

If you’re part of that majority, not only is it important to consider how much you save, but also where you keep your cash.

Two common options for saving money are savings accounts and money market accounts. Though they work very similarly, there are some differences to keep in mind before you open a new account. They account type that’s best for you is dependent on how much money you have available and the intended use for the funds. 

Here’s what you need to know to choose the best vehicle for your savings:

Money Market Account vs. Savings Account: What’s the Difference? 

Both money market accounts and savings accounts are liquid, low-risk accounts best used for an emergency fund or short-term savings goal. Here are some key differences between them:

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  • Interest Rates: Traditionally, money market accounts had higher APYs than savings accounts. However, that’s not usually the case today. There are plenty of high yield savings account options with rates just as competitive as money market accounts.
  • Checking Privileges: With a savings account, you can usually only make withdrawals by transferring money to a checking account or by visiting a bank or credit union branch and requesting a withdrawal through a bank teller. By contrast, money market accounts often include checking privileges, meaning you can write checks to pay for things from the account. 
  • ATM Use: Savings accounts usually cannot be accessed by ATM. But with a money market account, you may receive a debit card that you can use to withdraw cash at an ATM. Just know that some banks and credit unions limit the number of withdrawals or transfers you can make per month. 
  • Minimum Balance Requirements: Money market accounts usually have higher minimum balance requirements than savings accounts. And they may offer higher rates for different balance levels. For example, a money market account may offer one rate for balances under $10,000 and another rate for balances up to $25,000. 

What Is a Savings Account?

A savings account is simply a risk-free place to store your cash with a bank. You can withdraw your money at any time, and there’s no market risk or volatility, since savings accounts are not invested like an index fund or other investment account.

Traditional banks, online banks, and credit unions are all great places to find savings accounts. Savings accounts are bank accounts specifically designed to help you save for your goals. Consider using a savings account to build an emergency fund, save for a dream vacation, or tuck money away for a down payment on a house. 

While minimum amounts to open an account vary by bank and credit union, you can typically open a savings account with as little as $1 — though some high yield accounts may require higher minimum deposits. 

Savings accounts can earn interest. The amount of interest you can earn is expressed as an annual percentage yield (APY) — the amount of money you can earn in interest over a year. Traditional savings accounts from large financial institutions offer the lowest APYs. You can get much higher interest on your savings (even upwards of 1%) with a high yield savings account. 

However, savings account APYs are relatively low. That’s why they’re not great places to grow wealth or keep funds you intend to use for long-term goals like retirement.

What Is a Money Market Account?

A money market account can also be a useful savings tool, according to Danielle Miura, a certified financial planner (CFP) and founder of Spark Financial. “It serves as a mixture between a savings account and a checking account.” 

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Money market accounts are also available from banks and credit unions, including online banks. Like savings accounts, they’re most useful for shorter-term savings, whether you’re looking to stash your emergency fund or put money away for a down payment you plan to make in a few years.

In the past, money market accounts were much more competitive, and experts recommended them as a way to get a higher yield than traditional savings accounts. 

But according to Darcy Borella, a CFP and Zoe-certified advisor with Maia Wealth, attitudes towards them have cooled recently. “The main reason is the interest rate associated with money market accounts,” she says. 

Even the best money market accounts available today have interest rates only equal to (or in some cases, even less than) the top high-yield savings account rates.

One big difference between money market and savings accounts is how you can access your cash. With a money market account, you may be able to withdraw money from your account at an ATM, or write checks to pay for transactions from the account. 

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However, money market accounts also typically come with higher minimum deposit requirements to open an account, Borella says. You may also earn a lower APY if you maintain a balance below a specified amount. 

Pro Tip

Previously, the Federal Reserve limited the number of withdrawals or transfers you could make from both savings accounts and money market accounts under Regulation D for savings deposits. In the past, you could only make six transfers or withdrawals per month. Although the Federal Reserve removed the limit on withdrawals for savings accounts and money market accounts in 2020, some banks still independently enforce a six-per-month limit.

Which Type of Account Offers the Highest Interest Rates?

When it comes to interest rates, you can find competitive APYs from either account type. The average APY for savings accounts was 0.07% as of May 2022, while the average APY for money market accounts was 0.08%, according to data from the Federal Deposit Insurance Corporation (FDIC). 

Pro Tip

High-yield savings accounts from online banks tend to offer higher APYs than you’ll find from most savings and money market accounts available from brick-and-mortar banks. Some online savings account rates are even upwards of 1% APY.

However, you can find much higher interest rates than those averages. There are plenty of options for both money market account rates and savings account rates available today with APYs more than ten times the national average.

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Still, from a historical perspective, APYs are quite low right now. The Fed is only just starting to raise rates after being at near-zero through the past few years of the pandemic. Over the next several months, experts predict banks will continue to increase APYs on deposit accounts across the board. 

But even as those rates rise, they’re still relatively low. With such low APYs, only keep the cash you need on hand in case of emergency or for the near-term savings goals in a savings or money market accounts.

To protect against inflation, the rest of your cash should be invested in the stock market, with a diversified and risk-adjusted portfolio. For context, U.S. stocks averaged 10-year returns of 9.2% over the past 140 years, according to analysis by Goldman Sachs. 

If you need help developing an investment portfolio or deciding where to allocate your money, you can search for a fee-only financial advisor near you through the National Association of Personal Financial Advisors. 

Pros and Cons of Money Market Accounts and Savings Accounts

Both money market accounts and savings accounts are useful tools to plan for future priorities or to prepare for unexpected emergencies. When deciding which account is best for you, it can help to weigh the pros and cons of each: 

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Pros Cons
Money Market Accounts  • Historically higher APYs

• Offers checking privileges

• May include debit card access

• Can offer lower APYs on lower balances

• Higher minimum deposit

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• May have monthly account or service fees

Savings Accounts • High APYs on high-yield savings accounts

• Low minimum deposit

• Lower or fewer fees 

• Traditional savings accounts have lower APYs
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• Money cannot be accessed with check or debit card

• May have monthly account or service fees

Which Account is Right for You?

The best way to decide between a money market account and a savings account is to compare specific accounts with a fee structure, minimum deposit requirement, and APY that suits your goals.

If you have a smaller amount of money on hand, a savings account may be a better choice since savings accounts usually have lower account minimums and lower fees than money market accounts. However, if you’d like simpler access to your money through checks or debit transactions and you can meet the minimum deposit requirements, a money market account could be a better option for you.

Both account types are safe, accessible places to store your cash, and the differences are relatively minimal. The most important thing you’ll want to find is an easily accessible account (whether you prefer online or in-person access) with a competitive APY that offers a small return on your savings.

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As you compare your options, here’s a list of details to look at for each account:

  • Minimum Balance: Banks and credit unions can set their own limits for minimum deposits required to open a savings account or money market account. Generally, savings accounts have lower minimum balances than money market accounts. 
  • Fees: Financial  institutions may charge monthly service fees or account fees, though they may waive the fee if you maintain a minimum daily average balance or enroll in direct deposit. Many of the best accounts charge no fees at all.
  • Rates: Rates vary a great deal between financial institutions. Generally, online banks offer higher APYs than brick-and-mortar institutions because they have fewer overhead costs. 
  • Rate Restrictions: Be sure to read the fine print. While some financial institutions may advertise high APYs, the rates may be limited to customers with high account balances. 
  • Withdrawal Restrictions:  Although the Regulation D six-per-month rule has ended, many banks and credit unions still enforce restrictions on withdrawals. If you plan to make several withdrawals per month, you may incur additional fees. 
  • Bank Access: Although online banks tend to offer higher APYs and are insured just like traditional institutions, some people may prefer having a physical branch nearby. “A lot of people don’t trust online banks as much as a brick-and-mortar bank,” says Miura. “And so that may be a determining factor when choosing a bank.”

Money Market Account vs. CD

Certificate of deposit (CD) accounts are another common option for safekeeping your savings. However, you’ll have much more restricted access to your cash than you would with a money market or savings account.

When you open a CD, you set aside a fixed amount of money in an account for a specific period of time, usually one to five years. In exchange for keeping your money in that account and leaving it untouched, the bank will pay you interest. Typically, CDs earn a higher APY than savings accounts and money market accounts. As of May 2022, national average CD rates ranged from 0.03% APY for one-month CDs to 0.39% for five-year CDs, according to the FDIC. 

But CDS are less liquid than money market accounts. You cannot touch money in the CD until it reaches its maturity date. Otherwise, you’ll have to pay significant penalties. You also lock in the CD’s rate when you open it; if national APYs increase — as they’re expected to in today’s rising rate environment — you can’t take advantage of the higher rates without cashing out the CD and paying penalties. 

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