A money market account is an interest-bearing checking account that combines features of savings and checking in one

A money market account (sometimes called an MMA) lets you write checks and use a debit card while earning interest on your balance. The tradeoff is that most banks limit how many withdrawals you can make each month—typically six—and require a higher minimum balance than a regular checking account to earn that interest.

The interest rate varies by bank and by how much money you keep in the account. Banks that offer higher rates usually require $2,500 to $25,000 as a minimum, though some have no minimum at all. The rate you earn changes over time as the Federal Reserve adjusts its benchmark rates, so what you earn this month may be different next month.

Money market accounts are FDIC insured up to $250,000 per depositor per bank, the same as regular checking accounts. That means your money is protected if the bank fails.

Key Takeaways

  • Money market accounts earn interest while letting you write checks and use a debit card, but most banks limit you to six withdrawals per month.
  • You usually need a higher minimum balance—often $2,500 or more—to earn interest, though some banks have no minimum requirement.
  • The interest rate fluctuates based on what the Federal Reserve does, so your earnings change over time.
  • Your deposits are protected by FDIC insurance up to $250,000, the same protection as a regular checking account.

How the withdrawal limit works in practice

The six-withdrawal limit includes checks you write, debit card transactions, transfers to other accounts, and ATM withdrawals. It does not include deposits or transfers into the account. Some banks count each check as one withdrawal even if you write multiple checks on the same day; others count them separately.

If you exceed the limit, the bank may charge you a fee per extra withdrawal—usually $10 to $25 per transaction—or convert your account to a regular checking account without interest. A few banks waive the limit during certain months or for customers who maintain very high balances, so it is worth asking what your specific bank allows.

This limit exists because of an old Federal Reserve rule that treated money market accounts as savings products rather than transaction accounts. That rule was suspended in 2020, but most banks kept the limits anyway because they help manage costs.

When a money market account makes sense for your situation

A money market account works best if you have money you do not touch often but want to earn interest on while keeping it accessible. For example, if you keep $10,000 in an emergency fund and rarely withdraw from it, a money market account earning 4% to 5% annual interest could earn you $400 to $500 per year instead of earning nothing in a regular checking account.

It does not work well if you write many checks or make frequent transfers. If you routinely hit six withdrawals in a month, the fees will eat into any interest you earn. In that case, a regular checking account or a high-yield savings account paired with a checking account makes more sense.

Money market accounts also make sense if you want one account instead of juggling two—one for checking and one for savings. You get both functions in one place, though with the withdrawal limit as a trade-off.

Interest rates and how they compare to other accounts

Money market account rates change frequently and vary widely by bank. As of now, rates at online banks typically range from 4% to 5.35% annual percentage yield (APY), while rates at brick-and-mortar banks are often lower—sometimes 0.01% to 1%. The difference is because online banks have lower overhead costs.

A high-yield savings account at an online bank usually offers the same rate as a money market account but without the withdrawal limit. The main reason to choose a money market account over a savings account is if you need check-writing ability or a debit card. If you do not need those features, a savings account gives you more flexibility.

Regular checking accounts almost never earn interest, or earn so little (0.01% or less) that it does not matter. If you are choosing between a regular checking account and a money market account, the money market account wins on interest, but only if your balance is high enough to meet the minimum and you do not exceed the withdrawal limit.

Fees and minimums to watch for

Beyond the per-withdrawal fee, money market accounts may charge a monthly maintenance fee if your balance falls below the minimum. This fee is usually $10 to $25 per month. Some banks waive it if you set up direct deposit or maintain a certain balance.

Overdraft fees explore the same way they do on checking accounts—typically $25 to $35 per overdraft. Some banks offer overdraft protection, which links your money market account to a savings account or credit line so that overdrafts are covered automatically.

Before opening a money market account, ask the bank about all fees in writing: monthly maintenance, per-withdrawal over the limit, overdraft, ATM out-of-network, and any others. Compare the total cost of fees against the interest you expect to earn. If you plan to keep $5,000 in the account and the bank charges a $15 monthly fee but pays 4.5% interest, you are earning roughly $187 per year in interest but paying $180 per year in fees—a net gain of only $7.

How to open a money market account

Opening a money market account is the same process as opening any checking account. You will need a government-issued ID, your Social Security number, and proof of address (a recent utility bill or bank statement works). Most banks let you open online in 10 to 15 minutes.

You will also need to fund the account with your opening deposit. Some banks require this to be at least the minimum balance; others let you open with $0 and deposit later. Check the bank's website or call before you start the process so you know what to expect.

After you open the account, the bank will send you checks and a debit card by mail, usually within 5 to 10 business days. You can use the debit card when ready if the bank provides a temporary number online, but you cannot write checks until the physical checks arrive.

Frequently Asked Questions

Can I use my money market account like a regular checking account?

Mostly yes—you can write checks and use a debit card. The difference is the six-withdrawal limit per month. If you stay within that limit, it functions exactly like a checking account. If you exceed it, you pay a fee or lose the interest.

What happens if I go over the withdrawal limit?

The bank charges a fee per extra withdrawal, usually $10 to $25. Some banks convert your account to a regular checking account without interest after repeated violations. Check your bank's specific policy before opening.

Is the interest rate may provide?

No. The rate changes based on what the Federal Reserve does and what the bank decides. You might earn 4.5% one month and 4% the next. The bank will notify you of rate changes before they take effect.

What is the difference between a money market account and a money market fund?

A money market account is a bank deposit account insured by the FDIC. A money market fund is an investment product sold by brokerages and mutual fund companies, not insured by the FDIC, and carries different risks. They are separate products despite the similar names.

Can I transfer money from my money market account to another bank?

Yes, but it counts as a withdrawal under the six-per-month limit. If you plan to move money to other accounts frequently, a money market account is not the right fit for you.