What Is a Money Market Account?

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What Is A Money Market Account - Finance Digest

You can think of a money market account as a hybrid, part savings account and part checking account. You get the interest-earning power of a high-yield savings account and, with many MMAs, the accessibility of a checking account—debit card and check-writing privileges.

Money market accounts don’t offer as much liquidity as checking accounts—the number of transactions you can make per statement cycle is often limited. But they tend to provide more access to your cash than a savings account.

What Is a High-Yield Money Market Account?

High-yield money market accounts tend to pay several times the national average rate, which was 0.13% as of Aug. 15, 2022, according to data from the FDIC. You can typically find these accounts at online banks and credit unions.

How Does a Money Market Account Work?

Money market accounts work similarly to savings accounts in that you earn interest on the funds you deposit. These aren’t accounts meant for everyday spending, like a checking product. But they tend to offer limited liquidity and access to funds—you may be able to write checks or make debit transactions.

How to Open a Money Market Account

You can open a money market account in person or online. Banks and credit unions generally require you to fill out an account application and provide identification and other personal information to open an account.

source:ForbesAdvisor.com

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