Money Market Account
A Money Market Account (MMA) is a federally insured deposit account offered by U.S. banks and credit unions that typically pays a higher interest rate than a standard savings account while providing limited check-writing and debit card access, combining features of both savings and checking products.
A Money Market Account occupies a middle position in the U.S. banking product landscape — offering yields closer to a CD while maintaining more liquidity than a term deposit. Banks and credit unions that offer MMAs invest deposited funds in short-term, high-quality instruments such as Treasury bills, commercial paper, and certificates of deposit. The returns from these investments allow institutions to pay higher rates than standard savings accounts.
Money Market Accounts are distinct from Money Market Mutual Funds, which are investment products offered by fund companies and brokerage firms, not bank deposits. MMAs at FDIC-member banks are insured up to $250,000 per depositor, per institution, per ownership category, providing government-backed safety that money market mutual funds do not carry.
Historically, federal Regulation D limited withdrawals from savings-type accounts — including MMAs — to six per month. The Federal Reserve removed this restriction in April 2020, though many banks retained their own internal limits or continued to charge excess transaction fees. Consumers should review their specific institution's current terms, as practice varies widely.
MMA rates are variable, adjusting with broader interest rate conditions rather than locking in a fixed yield the way a CD does. This means MMA holders benefit when the Federal Reserve raises rates but see yields compress when rates fall. During the Fed rate-hiking cycle of 2022 to 2023, MMA rates at competitive online banks rose sharply, making them attractive alternatives to both traditional savings accounts and short-term CDs.
Minimum balance requirements vary considerably among institutions. Some banks require a minimum opening deposit of $1,000 to $10,000 to earn the advertised MMA rate or to waive monthly maintenance fees. Online banks and fintechs have increasingly offered high-yield MMAs with no minimum balance requirements, intensifying competition for deposit customers.
For cash management purposes, an MMA can serve as an accessible emergency fund repository or a holding account for funds earmarked for near-term expenditures. The combination of FDIC insurance, competitive variable rates, and limited transaction access makes it well suited for liquid reserves that a depositor wants to keep separate from day-to-day spending but accessible without penalty.