Money Market Accounts Explained
A money market account is a savings account that often pays a competitive rate and may come with checks or a debit card. This guide covers how money market accounts work, rates, minimums and fees, how they compare with high-yield savings and CDs, how they differ from money market funds, and how to choose one.
By Pond.com editors Updated 4 min read
Quick answer
- A money market account is a type of savings account at a bank or credit union, insured by the FDIC or NCUA.
- It often pays a rate similar to a high-yield savings account, sometimes higher on larger balances.
- Some come with checks or a debit card, making it easier to pay large bills straight from savings.
- Watch for minimum balances, monthly fees and limits on withdrawals.
- A money market fund is different; it's an investment held at a brokerage and isn't FDIC-insured.
A money market account sits somewhere between a checking account and a savings account. It pays interest like savings, and some accounts let you write checks or use a debit card. It's a useful option for some savers, but it's easy to confuse with a money market fund, which works very differently.
This guide is general information, not financial advice.
Money market accounts open nationwide with no monthly fee and no high balance needed to earn the rate, ordered by APY.
| Provider | APY | Minimum to open | Access | Details |
|---|---|---|---|---|
| ZYNLO Bank Money Market Account, opens in a new tab APY: 4.05% No limit on the number of withdrawals. | 4.05% | $0 | Online and mobile transfers | No limit on the number of withdrawals. Visit site ZYNLO Bank Money Market Account, opens in a new tab |
| Bank5 Connect High-Interest Money Market, opens in a new tab APY: 4.00% $100 needed to open and to earn the rate; $1 a month for paper statements. | 4.00% | $100 | Checks and debit card | $100 needed to open and to earn the rate; $1 a month for paper statements. Visit site Bank5 Connect High-Interest Money Market, opens in a new tab |
| Sallie Mae Bank Money Market Account, opens in a new tab APY: 3.60% | 3.60% | $0 | Checks | Visit site Sallie Mae Bank Money Market Account, opens in a new tab |
| Vio Bank Cornerstone Money Market Savings, opens in a new tab APY: 3.40% $5 a month for paper statements. | 3.40% | $100 | Online transfers | $5 a month for paper statements. Visit site Vio Bank Cornerstone Money Market Savings, opens in a new tab |
| Ally Bank Money Market Account, opens in a new tab APY: 3.10% Free withdrawals at Allpoint and MoneyPass ATMs. | 3.10% | $0 | Checks and debit card | Free withdrawals at Allpoint and MoneyPass ATMs. Visit site Ally Bank Money Market Account, opens in a new tab |
How we chose these
We included money market accounts from FDIC-insured banks that are open to customers in every state, with no monthly fee (or one that's easy to avoid with e-statements), no more than $100 needed to open and earn the rate, and no short-term promotional rates. We left out accounts that need a large balance to earn the advertised rate. We check independent rate surveys and the banks' own websites. Accounts are ordered by APY, highest first. Pond.com isn't paid by any bank listed here.
APY = annual percentage yield. Rates are variable and can change at any time. All accounts listed are FDIC-insured up to $250,000 per depositor, per bank, per ownership category. These are bank accounts, not money market funds.
For information only, not a recommendation. Rates and terms change often and may depend on where you live; check the details with the provider before you apply. Pond.com isn't paid by any provider listed here.
How a money market account works
- It's a deposit account at a bank or credit union, protected by FDIC or NCUA insurance up to $250,000 per depositor, per institution, per ownership category.
- The rate is variable. It can change at any time, often after the Federal Reserve moves interest rates.
- Rates may be tiered, with higher rates on larger balances.
- You can reach your money any time, though some banks limit the number of withdrawals or transfers each month.
- Some include checks or a debit card, handy for paying big bills, like a contractor or tuition, straight from savings.
Banks can usually pay competitive rates on these accounts because they lend out or invest the deposits, but your money is protected by deposit insurance in the same way as any savings account.
Money market accounts vs other options
| Money market account | High-yield savings | CD | Checking | |
|---|---|---|---|---|
| Rate | Variable, often tiered | Variable | Fixed for the term | Usually low or none |
| Access | Any time; may include checks or a card | Any time, by transfer | Penalty to withdraw early | Any time |
| Minimum balance | Often higher | Often none | Varies | Varies |
| Monthly fees | More common | Rare at online banks | Rare | Common at branch banks |
| Insurance | FDIC or NCUA | FDIC or NCUA | FDIC or NCUA | FDIC or NCUA |
For most people saving an emergency fund, a high-yield savings account is simpler. A money market account makes sense if you want easy check or card access to a larger balance, or if your bank pays more on it. For money you won't need until a set date, see CDs explained.
Money market accounts vs money market funds
The names are almost the same, but they're very different products:
| Money market account | Money market fund | |
|---|---|---|
| What it is | A bank or credit union deposit | An investment fund |
| Where you hold it | Bank or credit union | Brokerage or retirement account |
| Insurance | FDIC or NCUA | Not insured; brokerage accounts have SIPC protection, which doesn't cover investment losses |
| Value | Your balance plus interest | Aims to stay at $1 per share |
| Return | Interest rate set by the bank | Yield based on what the fund holds, minus fees |
Money market funds invest in very short-term, high-quality debt, such as Treasury bills. They're often where cash sits inside a brokerage or retirement account while you decide how to invest it. See how to start investing.
What to check before you open one
- The rate, and whether it depends on your balance
- The minimum to open the account and to earn the advertised rate
- Monthly fees and how to waive them
- Withdrawal limits and fees for going over them
- Checks and debit card access, if that's why you want one
- Insurance: confirm the bank is FDIC-insured or the credit union NCUA-insured
How to open one
- Compare rates and fees at a few banks and credit unions, including online banks.
- Apply online or in a branch with your ID, Social Security number and contact details.
- Fund the account by transfer from checking, enough to meet any opening minimum.
- Order checks or a debit card if the account offers them.
- Set up alerts for low balances so you don't drop below the minimum and pay a fee.
Review the rate every few months. If it falls well behind other banks, moving your money takes only a few days.
Who a money market account suits
- Savers with larger balances who can meet the minimum and earn a higher tier
- People who pay large bills occasionally and want to write a check from savings
- Anyone who wants savings and some spending access in one account at their main bank
If none of these fits, a high-yield savings account usually does the same job with fewer strings.
Common questions
Not necessarily. Rates are often similar. A money market account may be worth it if you want to write checks or use a debit card from your savings, or if it pays more on a large balance. If you don't need those, a high-yield savings account with no minimum is usually simpler.
Not from the account itself, as long as it's at an insured bank or credit union and within the $250,000 insurance limit. Fees and inflation can still reduce what your money is worth over time.
Yes. The interest is taxable income, just like interest from a savings account. Your bank will usually send a Form 1099-INT if you earn $10 or more in a year.
Money market funds invest in very short-term, high-quality debt and are among the lowest-risk investments, but they aren't FDIC-insured and their value isn't guaranteed. Losses have been very rare. Government money market funds, which hold mainly Treasury securities, are generally the most conservative.
It depends on the bank. A federal rule that limited savings and money market accounts to six withdrawals a month was dropped in 2020, but many banks still set their own limits and may charge a fee or convert the account if you go over.