What is a money market account?
A money market account is a deposit account that typically earns more interest than a standard savings account and gives you some of the flexibility of a checking account, including check-writing or debit card access in many cases. These accounts are generally insured by the FDIC at banks and the NCUA at credit unions, and they often require a minimum balance to open or avoid fees.
How a money market account works
A money market account (sometimes called an MMA or money market savings account) is offered by banks and credit unions. It earns interest on the money you keep in it and gives you limited ability to access those funds through checks or a debit card.
Here's what these accounts typically involve:
- Interest: Money market accounts generally earn more than a standard savings account, though rates vary by institution and change over time.
- Transaction access: Many come with check-writing privileges or a debit card. There's often a limit on how many transactions you can make each month.
- Minimum balance: Most require a minimum balance to open or to avoid monthly fees.
- Insurance: Deposits at banks are typically insured by the FDIC up to $250,000 per depositor. At credit unions, they're generally insured by the NCUA.
One thing worth knowing: a money market account is not the same as a money market mutual fund. A money market account is a bank deposit account with FDIC or NCUA insurance. A money market mutual fund is an investment product and is not federally insured in the same way.
Money market account vs. savings account
Both account types are designed for saving rather than everyday spending, and both earn interest. The main differences come down to access and requirements.
Interest rate
Typically higher
Typically lower
Transaction access
Often includes checks or debit card
Usually transfers only
Minimum balance
Often required
Often lower or none
FDIC/NCUA insured
Yes
Yes
A savings account tends to be simpler to open and maintain, especially with a smaller starting balance. A money market account may be worth a look if having more access to your funds matters and you can comfortably meet the minimum balance requirement.
Money market account vs. high-yield savings account
A high-yield savings account (HYSA) is a savings account that typically offers a higher interest rate than a standard savings account, often through an online bank. In some cases, HYSAs now offer rates that are competitive with or higher than money market accounts. The key difference is access. Money market accounts often come with check-writing or debit card features while HYSAs typically don't.
Interest rate
Competitive, but varies
Often competitive or higher
Transaction access
Often includes checks or debit card
Usually transfers only
Minimum balance
Often required
Often lower or none
Availability
Banks and credit unions
Often online banks
FDIC/NCUA insured
Yes
Yes
If maximizing your interest rate is the main goal and you don't need regular access to the funds, a high-yield savings account is worth comparing. If having some transaction flexibility alongside competitive interest matters to you, a money market account may be a better fit. Rates on both account types change, so it's worth checking current offers before settling on one.
Money market account vs. checking account
A checking account is built for everyday spending while a money market account is built for saving. The two can look similar if a money market account comes with a debit card, but they serve different purposes.
Interest
Yes, typically
Rarely or very little
Transaction limits
Often limited per month
Usually unlimited
Minimum balance
Often required
Varies
Best for
Growing savings with occasional access
Daily spending and bill payments
A money market account tends to make more sense as a place to keep funds you don't need to tap often but want available when the time comes.
Is a money market account right for you?
Money market accounts are often used for goals like building an emergency fund or saving for a large purchase. Here are some situations where a money market account tends to be a good fit, and some where a different option might make more sense.
A money market account may be worth considering if you:
- Want: to earn more interest than a standard savings account offers
- Need: occasional check-writing or debit card access tied to your savings
- Have: enough to comfortably meet a minimum balance requirement
Another account type may be a better fit if you:
- Want: to maximize your interest rate as your top priority (a HYSA may be more competitive depending on current rates)
- Need: frequent transaction access from the account
- Have: a smaller balance and want to avoid minimum balance requirements
What to look for in a money market account
If you're exploring money market accounts, a few factors are worth comparing across institutions:
- Annual percentage yield (APY): Rates vary and change over time. The APY reflects your estimated yearly earnings.
- Minimum balance: Depending on the account, a minimum balance may be required to open, to avoid monthly fees or both.
- Fees: Monthly maintenance fees can offset interest earnings, particularly at lower balances.
- Transaction limits: Some accounts limit how many withdrawals or transfers you can make per month.
- Insurance: Look for FDIC coverage at banks or NCUA coverage at credit unions.
Get started
A State Farm® agent can help you look at your options and find an account setup that fits your situation.
This content was developed with the help of AI and reviewed by State Farm editors.
The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.
