I have an emergency savings in a normal savings account. I noticed that the money I have with my bank for trading stocks, that isn't in stocks at the moment, is in a money market account. I read that money market accounts give more interest than vanilla savings accounts, typically.

Should I move all my emergency savings over to the money market account?

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    When I last checked (Canada, five years ago), savings accounts paid substantially higher interest than money market accounts. Not sure the case at the moment, though. Aug 8 '17 at 15:59

Depends on how urgent your need for the emergency savings might be. If the money market account allows you to get your money in the same amount of time as the savings account then there is no real downside, but if the account takes a few days for you to access and you need your money sooner then you probably shouldn't.

Also money market accounts DO give more interest than most savings accounts, but the interest rates are generally still pretty low, so it might be an improvement, but probably not a huge one


So long as you have complete, virtually instant access to funds through checks, debit card, or ATM transaction, then yes it would be a better option than a "vanilla" savings account.

If it's in a brokerage account that you would need to process a transfer and potentially wait a few days for everything to settle, then I would just keep it in savings. The amount earned in interest isn't worth the extra hassle.

A compromise might be to keep a few thousand in a savings account and the rest in a money market. That way you earn some interest and still have instant access to enough funds to cover most emergencies.


Most emergencies are less than 1,000 in nature. As such I would keep at least that amount in a checking/savings account at the bank from which you pay your bills or can get cash from. This amount may increase so you can avoid low balance fees, or because of the nature of your life style and income.

Beyond that, you can search for yield. I personally like online savings accounts like Amex Personal Savings, Ally or others. Money market accounts will work equally well. There you can keep the bulk of your emergency savings and large purchase savings. Keep in mind you still won't earn much. A 40K emergency fund will only earn you $38/month at Ally.


From a quick look at sources on the web, it looks to me like Money Market Accounts and savings accounts are both paying about the same rate today: around 1%, give or take maybe 0.4%. I suppose that's better than nothing, but it's not a whole lot better than nothing. (I saw several savings accounts advertising 0.1% interest. If they mailed you a check, the postage could be more than the returns.)

Personally, I keep a modest amount of emergency cash in my checking account, and I put my "savings" in a very safe mutual fund. That generally gets somewhere from making maybe 3% a year to losing a small amount. Certainly nothing to sing about, but better than savings or money markets. Whether you are willing to tolerate the modest risk or the sales charges is a matter for your personal situation and feelings.


I think it's only a choice of terminology. Typically with a money market account has check-writing privileges whereas a savings account does not.

In terms of rates, this blog has a good list of high interest yield savings accounts.


Disclosure: I am not affiliated with this blog. I just think it is a good resource to compare the rates across different banks.


I'm not a fan of using cash for "emergency" savings. Put it in a stable investment that you can liquidate fairly quickly if you have to. I'd rather use credit cards for a while and then pay them off with investment funds if I must. Meanwhile those investments earn a lot more than the 0.1 percent savings or money market accounts will.

Investment grade bond funds, for example, should get you a yield of between 4-6% right now. If you want to take a longer term view put that money into a stock index fund like QQQ or DIA. There is the risk it will go down significantly in a recession but over time the return is 10%. (Currently a lot more than that!) In any event you can liquidate securities and get the money into your bank is less than a week.

If you leave it in cash it basically earns nothing while you wait for that rainy day which many never come.

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