Money market account

Also called MMA, Money market deposit account, MMDA

An insured savings account that often pays tiered interest and may allow limited check writing or debit card access.

What it means

A money market account is a deposit account at a bank or credit union that blends features of savings and checking. It typically pays interest comparable to or above regular savings, sometimes with higher rates for larger balances, and may come with checks or a debit card. Minimum balance requirements are often higher than for regular savings.

Because it is a deposit account, it is covered by FDIC or NCUA insurance up to the standard limits. It is not the same as a money market fund, which is an investment sold by brokerages and fund companies and is not deposit-insured, although both are often called money markets.

Example

Suppose a bank pays a higher rate on money market balances above $10,000. Someone keeping $12,000 there for emergencies earns the higher tier and can still write a check if a large bill comes up.

How it’s used

Holding an emergency fund that needs occasional check access
Keeping a large cash balance insured while earning interest
Saving for a big upcoming expense

Strengths and weaknesses

Strengths

Insured and low risk
Often better rates than basic savings
Some check-writing or card access

Weaknesses

Higher minimum balances and fees if you fall below them
Withdrawal limits may apply
Rates may trail the best high-yield savings accounts

Educational information only, not financial, tax or legal advice. Rules, limits and rates change; check the IRS, your lender or plan, or a qualified professional before acting.