$20,000 high-yield savings account vs. $20,000 money market account: Which earns more now?

Saving money can always feel like an uphill battle. And, in recent years, especially so. With inflation at its highest point in decades, interest rates exponentially higher than they were just a few years earlier and returns on traditional savings accounts minimal, there were few easy ways to make ends meet, let alone save any substantial amount of money. So if you were able to do so, consider yourself fortunate. And if you were able to save a five-figure amount of money, you’re in an even better position.

With the amount of work and sacrifice that went into saving, say, $20,000, you’ll want to make sure that that money works as best as possible for you now. Two potential ways in which it can do so are via high-yield savings and money market accounts. Both operate similarly and both come with high rates in today’s still-elevated interest rate environment. To better determine which makes the most sense for your $20,000, however, it helps to calculate the interest-earning potential each account type offers right now. Below, we’ll complete the calculations.

Start earning more interest on your money with a high-yield savings account here.

$20,000 high-yield savings account vs. $20,000 money market account: Which earns more now?

Both high-yield savings and money market accounts have variable interest rates that will inevitably change over time. Predicting the interest-earning capabilities of either, then, requires a bit of speculation. Still, with rate cuts seemingly delayed until at least September and small ones expected for then or later, savers can establish an approximate framework of how much they stand to make with either. 

Here’s how much each can earn with a $20,000 deposit made this August, assuming rates stay constant:

• $20,000 high-yield savings account at 4.44% over six months: $439.18
• $20,000 money market account at 4.32% over six months: $427.43
• Difference between the two accounts: The high-yield savings account earns $11.75 more

• $20,000 high-yield savings account at 4.44% over nine months: $662.37
• $20,000 money market account at 4.32% over nine months: $644.56
• Difference between the two accounts: The high-yield savings account earns $17.81 more

• $20,000 high-yield savings account at 4.44% over one year: $888.00
• $20,000 money market account at 4.32% over one year: $864.00
• Difference between the two accounts: The high-yield savings account earns $24 more

So while the high-yield savings account earns more in each of the above circumstances, that’s thanks to that higher 4.44% rate, which may not be available for each saver. For example, Bankrate largely has high-yield savings account rates listed that are similar to those with money market accounts, making the interest-earning difference negligible between the two. 

With that being noted, money market accounts come with some highlights, like the ability to write checks, that high-yield savings accounts do not. With returns on both relatively the same, then, savers may need to look at the features each has to better determine which is more appropriate for their needs and goals.

Compare your high-yield savings and money market account options here to learn more.

The bottom line

High-yield savings and money market accounts have similar interest rates right now and both share the caveat of a variable rate that can and likely will decline in the months to come. While either can provide a secure home for your hard-earned $20,000, you may be better served by comparing both against a certificate of deposit (CD) account. This popular alternative account comes with similarly high rates that will remain fixed until the account matures. By comparing a CD, high-yield savings and money market account closely now, you’ll be better able to determine which is the most appropriate for your money, and which can earn you as much interest as possible while rates are still elevated.