A money market account is a type of savings account offered by banks and credit unions. It typically pays a variable, tiered interest rate that is often higher than a standard savings account, especially on larger balances. In exchange, it usually requires a higher opening deposit and limits withdrawals to six per month under federal regulation. Most MMAs also come with a debit card or check-writing ability, which is the main feature that distinguishes them from a plain savings account.
Because the rates are variable and can change weekly, the headline number is not the whole story. The two factors that most often separate strong accounts from weak ones are the minimum balance required to earn the advertised rate and the fee schedule, since a low rate with no fees can outperform a high rate paired with a monthly maintenance charge that wipes out the interest.
When comparing money market accounts, readers should look beyond the listed rate and weigh the minimum balance, the fee structure, the cap on monthly transactions, and whether the account is offered by an institution where they already hold other accounts or branches.
