When it comes to saving money, you already know the value of paying yourself first. But how and where you store your savings is (almost) as important as budgeting for savings in the first place. Not all savings products are equivalent, and you’ll get the most value from an account that fits your financial situation and goals.
Two popular options are basic savings and money market accounts. While these accounts have some similarities, there are also several differences to weigh when deciding which one is right for you. The good news is we’re here to help. Here’s what you need to know.
Let’s Start With What They Have in Common
Both basic savings and money market accounts share one major similarity: they help you save money and grow your savings over time. You’ll want to use them for savings goals — like building your emergency fund or stowing funds for the long-term — and use a checking account for your day-to-day transactions.
Basic savings and money market accounts are easy to set up. You can also manage them via online banking and the PNC Mobile app1. You can make unlimited deposits into both types of accounts, as well as take advantage of Auto Savings to set automatic monthly transfers from your PNC checking to your PNC savings.
Basic savings and money market accounts are also insured by the Federal Deposit Insurance Corporation (FDIC) for the maximum permitted by law. This federally-backed insurance protects your funds so you can rest easy.
However, There Are Several Differences, Including:
Your Initial Deposit
Basic savings accounts are ideal for beginner savers. If you’re fresh out of school, working your first job or setting up your first savings account, a basic savings account is the place to start. At PNC, you can open a Standard Savings account with a $25 deposit and start saving anytime.
Money market accounts are ideal for more established savers. At PNC, you can open a Premiere Money Market account with a $100 deposit and start pursuing your savings goals.
The Interest Rate You’ll Earn
While both basic savings and money market accounts pay interest to help you grow your savings, money market rates typically offer higher interest rates than basic savings accounts.
On top of the variable standard rate, a PNC Premiere Money Market account rewards your banking relationship by being able to earn higher relationship rates.* Tiered relationship rewards increase as you save more, helping you achieve your financial goals. Even a small rate increase can make a big difference over time.
Click here to check PNC’s current interest rates.
The Service Charge on Your Account
Basic savings and money market accounts are both subject to monthly service charges, including at PNC. But the amount of this fee — and how to avoid it — depends on which account you have.
At PNC, a Standard Savings account has a monthly service charge of $5. This fee can be waived if you maintain an average monthly balance of $300 or if you set up an Auto Savings transfer of $25 or more per month from your PNC Checking account to your Standard Savings account. The service charge is also waived if the account holder is younger than the age of 18.
PNC Premiere Money Market accounts have a monthly service charge of $12. You can avoid it by maintaining an average monthly balance of $5,000 or linking it to a select PNC checking account.
So, Which Account is Right for You?
Basic savings accounts are ideal if you don’t have a lot of experience saving, and you’re looking for a simple and convenient way to start. The small initial deposit makes it easy to set up, even if you’ve never saved before, so you can start building good savings habits. If you're a minor, a new grad, working your first job or have been living paycheck to paycheck, a basic savings account is likely the right step for you.
Basic savings accounts are also an appropriate choice if you’re looking for overdraft protection on a linked checking account. Overdraft protection can be linked to standard savings accounts. That means that when there's an insufficient balance in your checking account to pay for a purchase, funds, if available, are transferred from a protecting account to cover the transaction(s).
Money market accounts, on the other hand, are ideal if you're an established saver and want to get more from your savings. Higher base interest rates, and the potential to earn Relationship Rates* for higher balances, help you earn more interest as you save more.
If you’re holding your savings in a basic savings account and you qualify for a PNC Premiere Money Market account, transferring your funds can help you get more from your savings, thanks to that higher interest rate.
Ultimately, your goals might include a mix of the two. Consider opening a Standard Savings account for newer, smaller savings ventures or for overdraft protection, or a Premiere Money Market account for established savings to reap greater rewards.
No matter what your savings goal is, we’re here to help. Click here to learn more about PNC’s savings solutions, and start planning for a bright financial future today.