What does it mean to have a money market account?

A money market account (MMA) also referred to as money market deposit account (MMDA) is an account that pays interest based on current interest rates in the money markets. The interest rates paid are generally higher than those of savings accounts and transaction accounts but may require a sizable amount of capital.

How does a money market account ( MMA ) work?

The tradeoff for higher rates is often a higher minimum deposit requirement. With many MMAs, the account has to maintain a minimum daily balance to receive the highest available interest rate. Many MMAs have tiered savings levels that offer higher interest rates for higher levels of savings.

Can you withdraw money from a money market account?

Like a regular savings account, a money market account at a bank is insured by the Federal Deposit Insurance Corporation (FDIC), while one at a credit union is insured by the National Credit Union Administration (NCUA). You cannot withdraw money or make payments more than six times a month from a money market account…

Are there any downsides to a money market account?

The first downside is that you might not have enough cash to open a money market account since some banks require a large initial deposit to open one or to earn the interest you’d like.

Can you write checks from a money market account?

However, it is important to understand that money market bank accounts are not checking accounts. Even though it is possible to write checks from a money market bank account, realize that the Federal Reserve classifies them as savings deposit accounts; this means money market bank accounts are subject to Regulation D.

What kind of account is a money market account?

Money market accounts are deposit accounts held at banks and credit unions. Often referred to as money market deposit accounts (MMDA), they often come with features that make them distinct from other savings accounts. They are considered a great place to hold your money temporarily,…

Is there a fee to open a money market account?

A money market account is a type of savings account that often requires a higher minimum balance and earns a higher interest rate than a standard savings account. Some MMAs come with a debit card or checks, but federal rules require that they not be used more than six times per month. Some banks will charge a fee if you go over that number.

Can you deposit money into a money market account?

You can make as many deposits as you like to a money market bank account. Additionally, you can make in-person transfers out of your account. So, if you go to the bank to transfer money from your money market bank account to another bank account, it does not count toward your six.