What Is a Money Market Account?

Money market accounts are a type of savings account for both personal and business banking. In theory, they can get you competitive interest rates―plus more access to your savings than an ordinary savings account.

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But with high opening deposits and monthly fees, money market accounts aren’t always the best way to save.

So is a money market account right for you or your small business? This guide will help you decide. We’ll break down how money market accounts work, what makes them different from other accounts, why you might want one, and where to get the best ones.

How does a money market account work?

At base, a money market account works like any other savings account: you put money into your account, and then you earn interest on your account balance. Money market accounts have variable interest rates, so your APY (annual percentage yield) can and will change over time.

Since it’s a savings account, you will have some limits on how often you can make transactions from your money market account. Unlike other savings accounts, though, money market accounts make it relatively easy to use the money in your account. Most money market bank accounts let you use a debit card and write checks from your account.

That said, most banks limit you to six transactions from your money market account per month. This limit used to be required by law (Regulation D, if you want to know more). Since 2020, though, it’s just a standard practice and not a requirement. So you may be able to find a bank that gives you unlimited access to your money market account.

How does a money market account differ from other bank accounts?

You may be thinking a money market account doesn’t sound that different from other types of business bank accounts. So let’s talk about some of the biggest differences between money market accounts and other kinds of bank accounts.

Money market account vs. other bank accounts

Account type
Earn interest?
Write checks?
Transaction limit
Money market
Icon Yes  DarkYes
Icon Yes  DarkYes
Usually 6/mo.
Checking
Icon No  DarkRarely
Icon Yes  DarkYes
Unlimited
Standard savings
Icon Yes  DarkYes
Icon No  DarkNo
Usually 6/mo.
Certificate of deposit
Icon Yes  DarkYes
Icon No  DarkNo
No transactions during CD term

Money market accounts earn interest, while most checking accounts don’t. (You can find interest-bearing checking accounts, though.) That’s because money market accounts are designed for saving, while checking accounts are designed for spending. So checking accounts give you unlimited access to your funds, while money market accounts usually limit your monthly transactions.

Money market bank accounts have more in common with standard savings accounts. Both earn interest and limit how often you can access your money. But money market accounts let you use checks and debit cards, while standard savings accounts don’t. Money market accounts also tend to have higher minimum opening deposits and monthly fees.

Historically, money market accounts earned higher interest rates—though that’s changing as more high-yield savings accounts pop up. Both kinds of savings accounts have variable interest rates that change over time.

Both money market accounts and certificates of deposit (CD) earn interest, but CDs usually earn a better interest rate―and you get a locked-in (fixed) rate. The tradeoff? You can’t touch your CD account balance during your term, which can range from days to years. So while money market accounts earn less than many CDs, they give you more access to your funds.

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For a deeper comparison of money market and other accounts, check out our guide to the different types of business savings accounts.

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Is a money market account a good idea?

Money market accounts work well for many people and businesses.

That’s because money market accounts offer easier access to your money than a standard savings account would―but they also earn more interest than you’d get from a checking account.

In other words, money market accounts make a good compromise between standard savings and checking accounts.

Money market account pros and cons

Pros
pro Debit card usage
pro Ability to write checks
pro Potentially competitive interest rates
Cons
con High minimum opening deposit
con 6 transactions per month
con Inconsistent interest rates

That said, money market accounts aren’t the best choice for everyone. Their higher minimum opening deposits can be a problem. Likewise, money market accounts usually require you to keep a fairly high account balance (thousands of dollars) to waive the monthly fee. That makes them more expensive than standard savings accounts.

Before you open a money market account, make sure to calculate the interest rate and check out the account fees.

A money market account with a high interest rate and few fees is probably a good idea. But if your money market account has a lower interest and high account fees? You may be better off with a standard savings account instead―or even just keeping your money in a check account.

Where should I get a money market account?

Think a money market account sounds like a good fit? Then let’s help you find the right one.

As you shop for a money market account, pay close attention to interest rates and fees―as well as minimum opening deposits. You want to find a money market savings account that won’t cost you a lot but will earn a decent amount of interest.

With that in mind, you can see some of our favorite business money market accounts in the table below.

Compare the best money market accounts for businesses

Bank
APY
Monthly fee
Min. opening deposit
Open an account
2.32%–3.87%$5.00 (waivable)$100
0.75%–1.5%$14.95 (waivable)$1,500
1.01%$0.00$0
0.2%$10.00 (waivable)$1,000
0.01%–0.5%$20.00 (waivable)$5,000

Data as of 11/4/22. Offers and availability may vary by location and are subject to change.

These banks offer the most competitive interest rates and fees. You can learn more about them (and some great standard savings account options) in our rankings of the best business savings accounts.

Get a better business bank account

Want affordable banking with great perks? With BlueVine, you can get a fee-free business checking account―and you can even earn interest on account balances over $1,000.

The takeaway

Both individuals and businesses can use money market savings accounts. You’ll earn a variable interest rate and have somewhat limited access to your money― but you will get to use checks and a debit card.

So depending on the interest rate and fees, a money market savings account can offer more value than a standard savings account. That makes money market accounts a great supplement to your personal or business checking account.

Want to double down on interest with an interest-bearing checking account? Learn about our favorite option in our BlueVine business checking review.

Related reading

Money market account FAQ

Why would someone use a money market account?

People use a money market account to earn interest on their account balance while getting to use a debit card and checks. Money market accounts earn more interest than (most) checking accounts, but they make it easier to use your savings than standard savings accounts do.

What is the downside of a money market account?

The biggest downside to a money market account is the (usually) high minimum opening deposit. Many business money market accounts require you to deposit at least $1,000 to open an account.

Can I withdraw money from a money market account?

Yes, you can withdraw money from a money market account. In fact, you can withdraw funds at both your bank and at ATMs.

Can you lose your money in a money market account?

Most money market accounts are FDIC-insured for account balances up to $250,000, so you shouldn’t lose your money in a money market account.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for Business.org. She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
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