A money market account (MMA) or money market deposit account (MMDA) is a type of deposit account offered by banks and credit unions that pays interest based on current interest rates in the money markets. Here are some key features of a money market account:
- They are insured by the FDIC or NCUA, up to $250,000 held by the same owner or owners.
- They generally pay higher interest rates than regular savings accounts.
- They may come with debit cards and limited check-writing privileges.
- The number of withdrawals permitted each statement period is limited to six, as with a savings account.
- They are suited for short-term goals rather than long-term financial planning.
Its important to note that money market accounts should not be confused with money market funds, which are mutual funds that invest in money market securities. While money market accounts combine some features of savings and checking accounts, they are not checking accounts.
