Money Market vs Savings Calculator
Compare a money market account and a savings account side by side — final balance, interest, monthly fees and minimum balances, tax on interest, inflation, a year-by-year table and chart, and the savings APY you would need to break even.
How it works
Monthly rate = (1 + APY)^(1/12) − 1 · Each month: balance = balance × (1 + rate) + contribution − fee (if below the waiver minimum) · Interest = final balance − contributions + fees · After-tax interest = interest × (1 − tax rate) · Real value = balance ÷ (1 + inflation)^years
Both accounts here compound monthly, converting each stated APY into an equivalent monthly rate so the comparison is apples-to-apples; because APY already includes compounding, how often the bank credits interest no longer matters. Money market accounts often pay a slightly higher APY and may offer limited check-writing or a debit card, but they more often carry a minimum balance and a monthly fee — so the calculator lets you enter each account’s fee and the balance that waives it, and charges the fee in every month the balance falls short. Over time even a fraction of a percent compounds into a real gap, while a small fee can erase it on a modest balance. Under More options you can add contributions at the start or end of each month, raise them every year, apply a tax rate to the interest and an inflation rate to see the balances in today’s money. The results include a year-by-year table and chart and the savings APY that would exactly match the money market. The model assumes fixed rates, but real APYs float with the Federal Reserve, so revisit the numbers when rates move.
Worked example
A $20,000 deposit with no monthly contribution grows to $22,823.32 in a money market at 4.5% APY over three years, versus $22,497.28 in savings at 4.0% — the money market wins by $326.04 on rate alone. If the money market charges a $12 monthly fee unless the balance stays above $25,000, the fee applies every month: $432 in fees leaves it at $22,362.35, so the fee-free savings account comes out $134.93 ahead — the savings account would only need a 3.79% APY to match.
Sources: FDIC — Deposit insurance (coverage of savings and money market deposit accounts)
Frequently asked questions
What is the difference between a money market and a savings account?
Both are interest-bearing deposit accounts insured by the FDIC or NCUA up to $250,000. Money market accounts sometimes pay a higher APY and may allow limited checks or a debit card, but often need a higher minimum balance to avoid a fee or earn the top rate. Savings accounts are simpler. Compare the specific accounts, including fees.
Does a higher APY always win?
Not if the account charges a fee. Over any period with fixed rates, the higher APY earns more interest, but a monthly maintenance fee can cost more than the extra interest on a modest balance. Enter each account’s fee and waiver minimum to see the net result.
How is APY different from interest rate?
APY (annual percentage yield) already includes the effect of compounding, so it is the true yearly return. We convert it to a monthly rate to compound your balance each month accurately; the compounding frequency the bank uses does not change the result.
What does the break-even APY mean?
It is the savings-account APY that would give exactly the same final balance as the money market after fees. If a savings account you are considering pays more than that, it beats the money market for your deposit pattern.
Is the interest taxable?
Yes. In the US, interest from both account types is taxed as ordinary income in the year it is credited, and banks report it on Form 1099-INT. Enter your tax rate to compare the after-tax interest.
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Educational estimate, not financial advice.