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Money Market Account


A Money Market Account (MMA) is a type of savings account offered by banks and credit unions providing higher interest rates in return for larger deposits. These accounts usually require a higher minimum balance than regular savings accounts. Additionally, MMAs may allow limited check-writing and debit card access, blending features of both savings and checking accounts.


The phonetics of the keyword “Money Market Account” is: ‘Mʌni ‘mɑːkɪt əˈkaʊnt

Key Takeaways

  1. Higher Interest Rates: Money Market Accounts typically offer higher interest rates than regular savings accounts, making them a more profitable way to store your money.
  2. Liquidity: Unlike other investments like CDs, Money Market Accounts allow you relatively easy access to your funds. While you may be limited to a certain number of transactions each month, you will generally be able to withdraw or write checks against the account.
  3. Insurance Protection: Funds deposited in Money Market Accounts are insured by the FDIC up to the maximum allowed by law, adding a layer of safety to your investment.


A Money Market Account (MMA) is important in the world of business and finance due to several reasons. This type of account, offered by banks and credit unions, is a high-yield deposit account that allows investors to earn a higher interest rate than a regular savings account, while still offering a degree of liquidity and security. This balance of high returns and access to funds makes it an ideal choice for investors looking for less risky investment options or a place to store emergency funds. Additionally, MMAs often come with check-writing and debit card privileges, which can make them a convenient option for some savers. Therefore, MMAs can provide an exceptional blend of benefits – return, safety, and flexibility – rarely found in other single financial instruments.


Money Market Accounts, often referred to as MMAs, serve a dual purpose of saving and investing. Their primary role is to provide a secure and profitable avenue for individual and corporate customers to invest their idle cash while still maintaining liquidity. This liquidity is crucial – it means that, unlike other types of investments, customers can often access their money in an MMA with little to no penalty, making it an attractive option for those wanting to keep cash accessible while still earning some interest. MMAs are often used for holding large amounts of cash, generally by individuals who need the reserves for unexpected expenditures or who have more traditional savings accounts already topped up. Corporations often use MMAs for the same purpose, leveraging the account’s flexibility and security to meet short-term cash flow requirements or emergency needs while still earning interest. Because of their favorable interest and easy access, they are also gainfully employed as savings tools for specific short-term goals, like a down payment for a house or a holiday fund.


1. Goldman Sachs Marcus Savings: This bank offers a high-yield money market account where customers can store surplus funds. The account gives the benefit of higher interest rates compared to traditional savings and checking accounts. Customers get to enjoy access to their funds via transfers, checks, and ATM cards, and earn interest at the same time.2. Ally Bank Money Market Account: This is aimed to provide customers with a secure place to save while offering some checking account benefits. Customers can deposit their money and earn an attractive return, while still having the convenience of a debit card and check-writing capabilities. 3. J.P. Morgan U.S. Government Money Market Fund: In this case, the money market account is a mutual fund that invests in short-term, high-quality fixed income securities issued by the U.S. Government. It allows investors to earn a return while providing a high degree of liquidity, making it an attractive option for individuals or companies with idle cash they wish to temporarily put into low-risk assets until they find better investment opportunities.

Frequently Asked Questions(FAQ)

What is a Money Market Account?

A Money Market Account (MMA) is a type of savings account that usually requires a higher minimum balance to open and maintain, but typically offers a higher interest rate than a regular savings account. It’s often insured by the Federal Deposit Insurance Corporation (FDIC).

What is the purpose of a Money Market Account?

The main purpose of an MMA is to provide a safe place to deposit a large amount of money and earn relatively high interest. The funds are more accessible than a certificate deposit (CD) and usually earn more than a regular savings account.

How is interest calculated on a Money Market Account?

Interest on MMAs is usually compounded either daily or monthly. The rates are variable, which means they can increase or decrease depending on market conditions.

Are there any restrictions on transactions within a Money Market Account?

Yes, federal law typically allows only six withdrawals or transfers per statement cycle. However, some banks may set their own transaction limitations.

How does a Money Market Account differ from a savings account?

Although similar, the major differences are the minimum balance requirements and the interest rates. MMAs usually require a higher balance and offer higher interest rates compared to savings accounts.

Are Money Market Accounts safe?

Yes, Money Market Accounts are considered safe as they are often insured by the FDIC at banks or the National Credit Union Administration at credit unions.

Is a Money Market Account the same as a Money Market Fund?

No, an MMA is a bank account, while a Money Market Fund is an investment product and is not insured by the FDIC. Money in an MMA is guaranteed not to lose value, while a Money Market Fund can lose value if the investments go down.

Can you lose money in a Money Market Account?

The principal in a Money Market Account should not decrease unless you withdraw more than you deposit, or if the bank deducts fees. However, the interest rates may fluctuate.

How can I open a Money Market Account?

You can open a Money Market Account at banks and credit unions. Be sure to compare interest rates, monthly fees, minimum balance requirements, and accessibility options before you choose a provider.

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