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Key takeaways
- Money market accounts offer competitive interest rates while providing easier access to your funds than traditional savings accounts.
- Top money market accounts currently pay over 4 percent APY, significantly higher than the national average.
- You can write checks and use ATM cards with most money market accounts, combining the benefits of checking and savings accounts.
- Higher minimum balance requirements may apply, but the combination of competitive rates and flexible access makes money market accounts ideal for emergency funds and short-term savings goals.
Earning a competitive yield, having easy access to your money and safety are just a few of the reasons to consider opening a money market account. A money market account, or MMA, is a type of deposit account that earns higher interest than a checking account, while providing more liquidity than a savings account. But these aren’t the only advantages of storing savings in this type of account.
Money market accounts are similar to savings accounts in that they are primarily designed for stashing extra money away while earning interest. However, they also come with some checking account features, including the ability to write checks.
To know if this type of account is right for you, consider these four benefits to opening a money market account.
1. Competitive interest rates
Money market accounts traditionally pay higher interest rates than checking accounts and often match or exceed savings account rates. According to the FDIC, the average money market account in May 2025 pays 0.62 percent APY, but top-tier accounts offer rates over to 4 percent APY.
Current rate comparison:
- Average interest checking account: 0.07 percent APY
- Average savings account: 0.42 percent APY
- Average money market account: 0.62 percent APY
- Top money market accounts: Over 4 percent APY
The key is shopping around for the best rates. High-yield savings accounts and competitive money market accounts often offer similar rates, so compare your options to maximize your earnings.
Rate comparison: $10,000 deposit over one year
| Account Type | APY | Annual earnings |
|---|---|---|
| Average interest checking | 0.07% | $7 |
| Average savings | 0.42% | $42 |
| Average money market | 0.62% | $62 |
| Top money market | 4% | $400 |
Keep in mind that many high-rate money market accounts require higher minimum balances — sometimes $5,000 or more. If you don’t meet these requirements, you may pay fees or earn lower rates.
2. Check-writing privileges
One of money market accounts’ most valuable features is the ability to write checks. This isn’t available with traditional savings accounts or certificates of deposit, making money market accounts uniquely flexible.
Check-writing is particularly useful for:
- Large, one-time expenses (home repairs, medical bills)
- Monthly recurring payments (rent, utilities)
- Emergency situations when you need immediate access to funds
- Situations where electronic transfers aren’t accepted
Most money market accounts limit you to six transactions per month (including checks), though this restriction has been relaxed by many banks since the pandemic. ATM withdrawals and in-person transactions typically don’t count toward this limit.
3. ATM access and debit cards
Many money market accounts come with ATM cards or debit cards, giving you instant access to your money. This convenience makes money market accounts excellent for:
- Emergency funds: Quick access when unexpected expenses arise
- Travel money: Withdraw cash anywhere without penalty
- Flexible spending: Access funds without visiting a branch
Unlike regular savings accounts, ATM withdrawals from money market accounts typically don’t count toward monthly transaction limits, so you can access your money whenever needed.
4. FDIC insurance
Money market accounts offer the same safety as other bank deposits, via the Federal Deposit Insurance Corp. (FDIC) banks and National Credit Union Administration (NCUA) credit unions. When you choose an account from an FDIC-insured bank or NCUA-insured credit union, your deposits are protected up to $250,000 per depositor.
This means your money is just as safe as it would be in a checking account or savings account, but with better earning potential. Don’t confuse money market accounts with money market funds, which are investment products that aren’t FDIC-insured and carry slightly more risk.
Read more about the key differences between money market accounts and money market funds.
Who should consider a money market account?
Money market accounts are ideal for people who want to earn competitive interest rates on their savings and may need occasional access to funds through checks or ATM withdrawals. It’s important to make sure you have a large enough balance that can meet minimum requirements.
But money market accounts aren’t right for everyone. Consider other options if you:
Bottom line
Money market accounts are an attractive option to consider if you’re seeking a savings product that earns interest, offers more withdrawal options and is insured as long as you’re within federal insurance limits and guidelines.
Like all financial products, however, MMAs have their advantages and disadvantages and aren’t for everyone. Your financial goals can help determine whether a money market account is right for you. For example, if you need an account for daily expenses, a checking account is likely a better option. Or, if you don’t need access to your money for a specified period of time, a certificate of deposit will likely earn a higher rate of return.
It’s also important not to confuse money market accounts with money market funds, which are offered by brokerage firms and mutual fund companies, such as Fidelity and Vanguard. Money market funds generally offer higher returns than money market accounts, but they carry slightly more risk because they’re not insured by the FDIC or NCUA.
Before settling on a new account, evaluate your goals and shop around for a banking product that fits your needs.
Frequently asked questions
Former Bankrate writer René Bennett and freelancer Kevin Payne have contributed to an update of this article.
Read the full article here
