A money market account combines the interest-earning features of a savings account with the check-writing privileges and debit card access common to most checking accounts. With a money market account, or MMA, you’ll be able to deposit and withdraw funds while also getting a better yield than you would with a traditional savings account.
Many online banks, traditional banks and credit unions offer money market accounts. MMAs issued at federally insured banks or credit unions are protected against bank failures, making them a safe place to store and grow your savings.
How to open a money market account
You can open a money market account via an online bank or in person. Here’s what to do:
1. Decide on a money market account
Research which bank and money market account fits your needs. There are a number of factors to consider, including minimum balance requirements, monthly fees and ATM access. While a high annual percentage yield is important, you should also look at any other features you value in a money market account, such as customer service.
2. Prepare all required documents
To open a money market account, you’ll need the following information on hand: your Social Security number, contact information, your initial deposit and the method you’ll use to fund your account. You should be ready to submit a government-issued form of identification on request.
3. Deposit money into your account
Depending on the particular financial institution, you can usually make your initial deposit via an electronic funds transfer from another account. Some banks require a minimum opening deposit or minimum ongoing balance to maintain the account, while others do not.
What do you need to open a money market account?
- Government-issued photo identification
- Personal information, such as date of birth and income
- Social Security number
- Routing number and account number to fund your new MMA
- Name and personal information of any joint owners or beneficiaries
How to compare money market accounts
To choose a money market account, first determine what you’re saving for and how frequently you’ll need access to your funds. Next, research banks and credit unions to compare accounts and find the best match for your situation.
You’ll want to look for a competitive annual percentage yield, or APY. Keep in mind that interest rates on money market accounts are variable, unlike a fixed-rate deposit account like a CD. While many money market accounts offer higher APYs than those offered by savings accounts, your earning potential can fluctuate based on market conditions.
You should also take into account check-writing privileges, ATM access, transaction limits, minimum balance requirements and monthly service fees. Finally, double-check that the account is insured by either the Federal Deposit Insurance Corporation or the National Credit Union Administration.
What are the best Money Market accounts?
| Bank | APY | Monthly fee | Minimum deposit required |
| Vio Bank | 5.15% | $0 | $100 |
| Sallie Mae | 4.75% | $0 | $0 |
| Ally Bank | 4.40% | $0 | $0 |
| First Internet Bank of Indiana | 3.76% | $5 | $100 |
| Synchrony Bank | 2.25% | $0 | $0 |
| CIT Bank | 1.55% | $0 | $100 |
Note: The APYs provided were collected from the issuing organizations’ websites and are valid as of Aug. 3, 2023.
What’s the difference between a savings account and a money market account?
A money market account is different from a traditional savings account. Depending on the bank, when you open a MMA, you can get checks and an ATM or debit card for withdrawals. Some savings accounts also allow you to withdraw cash via an ATM, but they don’t issue checks.
Several savings accounts let you unlimited withdrawals or transfers as you need, but transactions on money market accounts are typically limited to a handful per month. If your account restricts the number of withdrawals or transfers, you can incur a fee with every transaction over the maximum amount.
While money market accounts typically have higher minimum balance requirements and monthly service fees than savings accounts, the tradeoff is that you could get a higher APY and greater earnings on your money.
What are the benefits of a money market account?
These accounts offer many of the same benefits as savings accounts, checking accounts or certificates of deposit.
Safety
Money market accounts are FDIC- or NCUA-insured up to $250,000 per depositor, per institution. Your money will be safe even if your bank or credit union fails.
Higher interest rates
A money market account typically earns more interest than a regular savings account.
Check and debit card access
Money market accounts also usually come with a debit card and checks, which gives you more ways to access your cash than a traditional savings account.
What are the downsides of a money market account?
The main downsides of money market accounts include the additional fees charged, higher minimum balance requirements and the restrictions on the number of monthly transactions allowed.
Factors to consider when opening a money market account
- Annual percentage yield, or APY: The higher the APY, the better the earnings on your money.
- Minimum balance requirements: If you don’t have a huge chunk of money to put aside, or you anticipate withdrawing money more regularly, check to see if the bank requires you to keep a high balance.
- Transaction limits: Some financial institutions limit the transactions you can make on a money market account to six per month, and you may be charged for any transactions beyond that amount.
- Check writing and ATM access: Most money market accounts will provide a debit card and checks so you can access cash or pay bills.
- Fees: Some financial institutions charge a fee if you go over the maximum amount of transactions you are permitted with an account, or if you don’t meet a minimum balance requirement.
The bottom line
Money market accounts can be opened at traditional banks, online banks and credit unions. They’re a low-risk savings vehicle with higher interest rates than traditional savings accounts that also offer the flexibility to write checks. Note that a money market account isn’t the same thing as a money market fund, which is a low-risk investment vehicle.
FAQs
Some of the best money market accounts have no minimum deposit requirements, while others require $100 or more.
Money market accounts have variable APYs, so while you may get solid earnings in a high-rate environment, the interest won’t be as predictable as it is with a certificate of deposit, or CD. Depending on the financial institution, a money market account might limit the number of debit card purchases, online transfers and check transactions allowed each month.
A money market account has the liquidity of a checking account, meaning you can make withdrawals and have access to your cash. However, some banks or financial institutions may restrict how many withdrawals are permitted per monthly statement.
Before you open a money market account, figure out which account fits your financial needs, then compare it to a variety of CDs and high-yield savings account. While money market accounts share many features with traditional savings and checking accounts, they also offer unique benefits, including more competitive yields. They are also safe: MMAs are FDIC insured, so your account will be protected up to $250,000 per account, per person.
Correction: An earlier version of this article was assisted by an AI engine and it mischaracterized some aspects of money market and savings accounts. Those points were all corrected. This version has been substantially updated by a staff writer.
