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Banking

Money market account

Also called: money market deposit account, MMDA

A money market account is an interest-bearing deposit account at a bank or credit union, sometimes with checks or a debit card. As a deposit, it can be federally insured, unlike a money market mutual fund, which is an investment.

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How it works

A money market account sits between a basic savings account and a checking account. It pays interest, may pay more than other savings accounts, and may come with checks or a debit card. In exchange, it may require a larger minimum deposit or balance, and the number of transactions by check, debit card or electronic transfer each month is often limited.

The rate can change over time, and some accounts pay different rates at different balance levels, called tiers. A fee may apply if the balance falls below a minimum. Because it is a deposit, a money market account at an FDIC-insured bank or federally insured credit union is covered like other deposits, up to $250,000 per depositor, per institution, per ownership category.

Compared with a high-yield savings account, a money market account may offer easier access through checks or a debit card, while the savings account may have lower minimums; the rates themselves depend on the institution. Comparing the APY at the balance you expect to keep, the minimum needed to avoid fees and any monthly transaction limits gives a clearer picture than the account’s name.

Try it with your own numbersAPY CalculatorFree APY calculator. Convert an interest rate and compounding frequency into annual percentage yield, and see the interest a deposit could earn.

Related terms

Sources and further reading

Examples are illustrative and focus on U.S. personal finance. This page is educational, not individual financial, investment, tax, or legal advice. Read our editorial approach or report a correction.

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