07 Mar What’s the difference between these interest-paying accounts?

Q. My children both have savings accounts that don’t make much interest at all. I was thinking of moving them to a higher interest rate money market, but then I also heard about a money market mutual funds that paid even more. What’s the difference?
— Dad

A. It’s a very competitive market out there for interest-paying accounts.

Money market accounts are deposit accounts while money market mutual funds are investments, said Bill Connington of Connington Wealth Management in Paramus.

“A money market fund is a type of mutual fund that invests in high-quality, short-term debt instruments, cash, and cash-equivalents. It is also protected by SIPC,” he said. “Money market accounts are FDIC-insured while money market mutual funds are not.”

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This story was originally published in March 2025.

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