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Some financial decisions are harder than others. Should you apply for a 15-year or 30-year fixed-rate mortgage loan? Should you purchase a new car or a used one? Will going back to school in your 40s bring you a high enough salary to offset the high cost of a college education?

Some decisions, though, require a bit less analysis. Choosing between a savings account or a money market account is one of these.

The reason? Despite the different names, there is little difference between money market and savings accounts.

The Accounts

You probably know what a savings account is. It is a safe place in which to hold your money. Your bank or credit union will pay you interest on the money in your account -- though the interest rate on savings accounts is typically rather low. The Federal Deposit Insurance Corporation or National Credit Union Association insures savings account, up to certain amounts, so that you will not lose your dollars even if your bank or credit union falls into financial ruin.

A money market account is a surprisingly similar economic tool. It, like a savings account, is a safe place to store your money. Also, like a savings account, your dollars are protected. 

There are a few minor differences, however.

Money Market Accounts

Money market accounts usually require consumers to maintain a higher minimum balance. Money market accounts might also be more flexible, allowing you to write checks -- and quickly access the money in your account -- against the dollars you've deposited in them.

The primary benefit of a money market account? They typically pay out higher interest rates on the money you've saved.

Traditional savings accounts usually require that you maintain a lower minimum balance. Also, savings accounts do not come with any checking options. You cannot write checks against the balance in your bank savings account.

Finally, savings accounts pay a lower amount of interest.

Does it Matter?

The truth, though, is that for most consumers, the difference between savings accounts and money market accounts do not matter too much. The main difference between the two is the higher interest rates that come with a money market account. However, rates on these accounts are still fairly low when compared to other investment vehicles. This means that you'd need to invest a lot of dollars in your money market account to generate an appreciable amount of interest.

Who is a good candidate for a money market account? Someone who has a lot of money to deposit and who would prefer the flexibility to write checks against their savings.

However, in reality, the decision to go with a traditional savings account or a money market account will not make too much of a difference in your financial health.

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