Money market account

A money market account is a deposit account offered by banks and credit unions. It holds cash and pays interest on the balance. The rate can change, and it often runs higher than the rate on a basic savings account, though this varies by institution.

Unlike a plain savings account, a money market account may allow limited check-writing or debit card access. The number of certain withdrawals or transfers per month can be capped by the institution. Some accounts also require a minimum balance to open or to earn the stated rate.

Money market accounts held at insured institutions are protected by federal deposit insurance, through the FDIC at banks or the NCUA at credit unions, up to the applicable limits. Because it is a bank deposit product, the principal does not fluctuate with markets. The main consideration is that the interest rate can rise or fall.