A money market account is a type of savings account that pays interest based on the current interest rates within money markets — the marketplace for short-term funds and savings products. Money market accounts may offer you a debit card and the ability to write checks, giving them some of the same capabilities as checking accounts. Show
What is a money market account, and how can you tell if it’s right for you? That depends on how you plan to use the account. There are limits to monthly money market transactions, for instance. Other factors may determine if it’s the right fit for your needs. Money market account definitionMoney market accounts are savings accounts that pay competitive interest rates based on borrowing rates from the money market. In general, the average money market account provides several features from both savings and checking accounts, including:
First Republic offers money market accounts and money market checking services. How does a money market account work?A money market account shares many of the same key features as a checking account, which may differ from your average savings account. These features include debit cards and checks, which make it easier for you to make transactions from your money market account. Credit unions, online banks or brick-and-mortar financial institutions may all offer their own money market accounts. How do money market accounts accrue interest?In general, money market accounts accrue interest that’s compounded daily and paid out monthly. Since interest compounds daily, your overall interest payments are based on your compounded account balance. Interest tied to your account, in addition to the money market account's principal, grows per day, based on current interest rates. Benefits and limitations of a money market accountAs with any financial product, there are benefits and limitations to having a money market account. Benefits of a money market accountSeveral general benefits come from opening and funding a money market account.
Limitations of a money market accountMoney market accounts come with potential drawbacks. These depend on how you plan to fund and use the account. Here are some of the possible drawbacks to using a money market account:
How do money market accounts compare with other types of accounts?While money market accounts can offer similar advantages to other bank accounts and financial products, there are key differences between this type of account and three related options: regular savings accounts, certificates of deposit and high-yield savings accounts. Money market account and savings accountDistinctions between money market accounts vs. savings accounts are small but important. Money market accounts are similar to savings accounts, except they offer more ways to move funds and make transactions. Savings accounts may also offer a lower interest rate than a money market account, which is tied to market interest rates. Money market account and certificates of deposit (CDs)The difference between a money market account and a CD is more distinct. Money market accounts are similar to CDs insofar as they both pay competitive interest rates. However, the cash within a CD is harder to access than money market account funds. Most CDs have penalties for early withdrawal, whereas money market accounts typically give you access to funds via debit card, check or online transfers. Money market account and high-yield savings accountsThere are many similarities between money market accounts and high-yield savings accounts. A high-yield savings account may also provide competitive interest rates, but it will likely differ from current money market account rates. High-yield savings accounts may also not come with checks or debit cards, which is worth considering, depending on how you plan to use the account. Is a money market account right for me?Money market accounts are generally a type of savings account that can help you meet or exceed your savings goals. There are several reasons why you might want to consider a money market account versus a checking or regular savings account.
Although money market accounts come with a distinct set of advantages, they might not be the right option for your finances. It’s important to consult a financial professional to explore your options and discover which one can help you grow your savings. This information is governed by our Terms and Conditions of Use. Can a money market account be a checking account?Checking account: A money market account isn't a checking account. MMAs may have check-writing and debit card features, but, as with regular savings accounts, they can be limited to six “convenient” transfers or withdrawals a month. That includes transactions by check, debit card swipe or online transfer.
Can I use a money market account as a savings account?A money market account is a type of savings account that gives you a chance to earn a higher rate of interest on your account balance, keep your money safe and sound, and have more access to your account than a typical savings account (think checks and debit cards).
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