Money Market Accounts Explained
Money market accounts (MMAs) sit at the intersection of savings and checking accounts, offering higher interest rates than traditional savings with some check-writing and debit card capabilities. Here's everything you need to know.
What Is a Money Market Account?
A money market account is a deposit account offered by banks and credit unions that typically pays a higher interest rate than regular savings accounts. Unlike money market funds (which are investment products), MMAs are FDIC-insured up to $250,000, making them a safe place for your cash.
How Money Market Accounts Work
- They usually offer tiered interest rates — higher balances earn higher APYs
- Many come with check-writing privileges and a debit card
- They may have higher minimum balance requirements than regular savings
- Federal Regulation D limits were relaxed, but many banks still limit certain withdrawals
Money Market Account vs. Savings Account
- Interest rates: MMAs often pay slightly more, especially at higher balances
- Access: MMAs may include checks and debit cards; savings accounts typically don't
- Minimum balance: MMAs usually require a higher minimum ($1,000-$10,000 vs. $0-$100)
- FDIC insurance: Both are insured up to $250,000
Money Market Account vs. CDs
The main difference is flexibility. CDs lock your money for a set term in exchange for a guaranteed rate. MMAs let you access your money anytime but rates can change. Choose CDs for money you won't need soon; choose MMAs for accessible savings that still earn competitive interest.
Who Should Use a Money Market Account?
- Emergency funds — accessible but earning more than a checking account
- Large savings goals — down payment funds, wedding savings, or tax reserves
- Business operating funds — the check-writing feature is useful for businesses
- Short-term parking — money you'll need within 6-12 months
What to Look For
- APY: Compare rates across multiple banks. Online banks typically offer the best MMAs.
- Minimum balance: Make sure you can comfortably meet the requirement to avoid fees.
- Fees: Watch for monthly maintenance fees if your balance dips below the minimum.
- Rate tiers: Understand the tiered structure — some banks advertise high rates only for very large balances.
Current Rates
As of early 2026, competitive money market accounts are offering APYs between 4.00% and 5.00%, though rates vary based on balance tiers. Online banks and credit unions consistently offer the best rates.
The Bottom Line
Money market accounts are a solid option for savers who want competitive interest rates with easy access to their money. They're especially useful for emergency funds and short-term savings goals. Compare MMAs alongside high-yield savings accounts to find the best rate for your situation.
