Which type of account typically offers higher interest rates than savings accounts?

Money market accounts are designed to offer higher interest rates compared to traditional savings accounts. This is primarily because money market accounts typically require a higher minimum balance and may offer limited transaction capabilities, allowing banks to manage their funds more effectively while providing customers with greater returns.

The appeal of money market accounts lies in their ability to combine features of both savings and checking accounts. They allow for limited check writing and debit card access, which can offer more liquidity while still providing a higher interest rate incentive for depositors.

In contrast, savings accounts generally offer lower interest rates as they are intended for everyday saving rather than investment. Checking accounts are primarily used for day-to-day transactions and usually earn very little or no interest. Standard bonds, while they can provide investment income, operate on a completely different mechanism and are not a type of bank account.