Consumers today have more options than ever for spending and saving money. Often, these activities occur within two kinds of bank accounts: checking and savings. But one type of account \u201cblends\u201d features of both, offering more flexibility and earning potential. <\/p>\n\n\n\n
Here\u2019s what to know about money market accounts. <\/p>\n\n\n\n
See how Quicken helps you track all your finances. A money market account (MMA) is a type of deposit account, like a checking or savings account. Though technically classified as savings, MMAs combine features of both. <\/p>\n\n\n\n You can open an MMA with many banks and credit unions. After setting the account up, you deposit your money and (usually) earn a higher interest rate than the institution\u2019s non-MMA accounts. Some also issue debit cards or checks linked to the account so you can spend your savings. <\/p>\n\n\n\n But MMAs have some important limitations. They might cap how many fee-free transfers you can make each month. So, while you can spend from your account, they may be best used for large or one-off expenses. Additionally, MMAs may set different balance minimums than checking or savings accounts. <\/p>\n\n\n\n This combination of features can make MMAs an ideal place to stash short- to medium-term savings, like emergency funds<\/a>. However, they\u2019re not ideal for every situation. <\/p>\n\n\n\n Like all financial accounts, MMAs come with a unique set of features and considerations. Here are the main ones to know. <\/p>\n\n\n\n Some money market accounts set high minimum balance requirements \u2014 up to $5,000 or more! Even if you can open an account for less, your average balance may determine the interest rate according to tiers. (E.g., you might earn 3% on balances under $5,000 and 4% on balances over $5,000.) The best rates usually go to accounts that maintain at least $10,000 to $25,000. <\/p>\n\n\n\n Similar to deposit accounts, money market accounts qualify for FDIC\/NCUA insurance. The Federal Deposit Insurance Corporation (FDIC) protects traditional banks. The National Credit Union Alliance (NCUA) covers credit unions. Both types of institutions must insure customer deposits for at least $250,000. <\/p>\n\n\n\n Importantly, this $250,000 limit applies to accounts in each account type, like joint vs. single accounts. If you have both a checking and savings account at one bank, these balances fall under the individual account type with a $250,000 total insurance limit. But if you own a third account with your spouse, that joint money has its own $250,000 limit. <\/p>\n\n\n\n MMAs may come with debit cards or checks linked to your account for easy access. However, as with savings accounts, money market accounts aren\u2019t for everyday banking. <\/p>\n\n\n\n Formerly, a federal law, Regulation D<\/a>, limited you to six \u201cconvenient\u201d transfers or withdrawals from savings and MMAs each month. Trying to move money more often resulted in extra fees or even account closure. (\u201cLess convenient\u201d transactions didn\u2019t count toward this limit. These included ATM withdrawals, in-person bank transactions, or mail transfers.) <\/p>\n\n\n\n This provision of Regulation D was suspended during Covid-19 and has not been reinstated. While some banks still follow the old rule, others now set higher limits. However, most MMAs still have strict monthly transfer limits due to their higher yields. So, be sure to read the fine print before opening an account! <\/p>\n\n\n\n See how Quicken helps you track banking, credit cards, investments, and more. Money market accounts are just one place to earn interest on your stashed cash. Savvy savers might also consider savings accounts and CDs. But before you choose, you should know the key differences:<\/p>\n\n\n\n
\nLearn more \u2192<\/a><\/p>\n<\/div>\nWhat is a money market account and how does it work?<\/h2>\n\n\n\n
Money market accounts: Key features<\/h2>\n\n\n\n
High balance requirements<\/h3>\n\n\n\n
Insured savings<\/h3>\n\n\n\n
Limited withdrawals and transfers<\/h3>\n\n\n\n
\nLearn more \u2192<\/a><\/p>\n<\/div>\nMoney market accounts vs. savings accounts<\/h2>\n\n\n\n
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