Comparison · Reviewed 3 October 2026
High-yield savings vs money market: the rates are usually close, so the real differences are insurance and access.
A high-yield savings account (HYSA) and a money market account (MMA) are both bank deposits with FDIC insurance. A money market fund (MMF) is an investment fund held at a brokerage: it is not FDIC insured and its value can, rarely, fall. All three pay variable rates that move with Federal Reserve policy, so check each provider's current APY or 7-day yield rather than relying on any figure printed here.
Comparison table
| Feature | High-Yield Savings Account | Money Market Account | Money Market Fund |
|---|---|---|---|
| What it is | Bank or credit-union deposit | Bank or credit-union deposit | Mutual fund investing in short-term debt |
| Rate | Variable APY, set by the bank | Variable APY, set by the bank | Variable yield, quoted as a 7-day SEC yield |
| Insurance | FDIC (NCUA at credit unions), $250,000 per depositor, per bank, per ownership category | Same as a HYSA | None. SIPC covers a broker's failure, not investment losses |
| Access | Online transfers; some banks cap monthly withdrawals | Often includes checks or a debit card; some banks cap monthly withdrawals | Sell shares in the brokerage account; cash usually available the same or next business day |
| Minimum deposit | Varies by bank, often none | Varies by bank; often higher than a HYSA | Varies by fund |
The old federal limit of six convenient withdrawals a month (Regulation D) was removed in 2020, but banks may still set their own limits, so read the account terms.
Illustration: $50,000 for 2 years
Hypothetical rates, chosen only to show how a small rate gap compounds. They are not current market rates. Interest is compounded once a year for simplicity.
| Hypothetical rate | Year 1 interest | Year 2 interest | Total earnings |
|---|---|---|---|
| 4.0% | $2,000.00 | $2,080.00 | $4,080.00 |
| 4.3% | $2,150.00 | $2,242.45 | $4,392.45 |
| Difference | $150.00 | $162.45 | $312.45 |
Interest from all three is generally taxable as ordinary income. Some money market funds that hold US Treasury securities pay income that may be partly or fully exempt from state income tax, which can matter in high-tax states.
Safety: what each protection covers
HYSA and MMA: FDIC insurance covers up to $250,000 per depositor, per insured bank, for each account ownership category. Balances above that at one bank, in the same ownership category, are not covered. Holding money at more than one bank, or in different ownership categories, can extend coverage.
Money market fund: not insured. Funds are regulated by the SEC and limited to short-term, high-quality debt, and losses have been rare, but they have happened: in 2008 the Reserve Primary Fund fell below $1.00 a share. SIPC protection applies if a brokerage fails, not if the fund loses value.
Where each tends to fit
- HYSA: savings you want insured and reachable by online transfer, such as an emergency fund.
- MMA: the same insured savings when you also want check-writing or a debit card on the account.
- MMF: cash already held in a brokerage account, such as money between investments, where you accept no deposit insurance in exchange for convenience and, sometimes, a slightly higher yield.
This page is general education, not a recommendation for your situation. Compare current rates, fees and account terms directly with providers before moving money.