What Is a Money Market Account (MMA)?

Get reliable money market information and make smart savings decisions

A money market account is a higher-interest deposit account offered by financial institutions, including banks and credit unions. If you’re saving for a future goal, or want your money to grow more quickly while avoiding unsecured market investments, a money market account may be the right choice for you. Use the information below to learn more about the advantages of money market accounts and decide if they’re the right choice for you.

Essential money market information

Now that you know what a money market account is, it’s important to learn more about how it works, what restrictions it carries and how it could fit within your savings portfolio . Customers who open money market accounts are usually required to open and maintain the account with a higher minimum balance than traditional savings accounts. They are also more limited in their ability to withdraw money from the account. (Account holders are allowed roughly three to six withdrawals per month.) In exchange for leaving a higher amount untouched for an extended period of time, the bank may offer a higher interest rate to help you grow your balance faster.

What are the main advantages of a money market account?

While there are several reasons to save with a money market account, the main advantage is the account’s higher interest rate. Other benefits of opening a money market account include:

  • Easy access to your money: Unlike certificates of deposit (CDs), you can access your money market savings several times a month.
  • Check-writing ability: You can write a limited number of checks directly from your money market account, eliminating the need to transfer funds from savings to checking.
  • Insurance: Money market accounts, like all bank savings products, are insured by the FDIC (Federal Deposit Insurance Corporation).
  • Stability: The money in your account will grow at an established rate, which makes money market accounts a more reliable savings vehicle than stock market investments.

What is a money market fund and how does it differ from a money market account?

If you search for money market accounts on the Internet, you may find information about money market funds (also known as money market mutual funds). Money market funds are an investment in short-term debt securities, which means they typically reach maturity in under a year. In contrast, money market accounts earn more interest the longer you save, making them better as a multi-year savings option. Learn more about the differences between money market accounts and money market funds in the chart below.


  Money Market Account Money Market Fund
Places money in low-risk, low-return investment X X
FDIC-insured bank account up to $250,000 X  
Value can decline based on market conditions   X
Easy to withdraw money from account X X
Better for short-term savings   X
Better for long-term savings X  

What is the best way to use a money market?

You may already be contributing funds to a traditional savings account on a monthly basis. While this is a good tool to grow initial savings and to continue saving for short-term goals, a money market account can be a more effective way of saving for something further down the road, such as:

  • Long-term savings: Whether you're saving for a wedding, next year’s vacation, a new car or other goal, a money market account can help you earn more toward your goal and potentially reach it more quickly. A money market account can also be used alongside specialized accounts to save for a home or college tuition for your child.
  • Emergency funds: If you have a rainy day fund that you'd like to grow even further, a money market account is a perfect way to save for the future without drastically changing your habits. Plus, money market withdrawal restrictions mean you'll be less likely to dip into the fund for other things, keeping your money safely tucked away for when you need it most.
  • Retirement savings: In addition to taking advantage of your 401(k) and making regular deposits into an IRA, consider using a money market account to set aside more funds for retirement . If you have maximized your yearly contribution to your Traditional IRA, Roth IRA or 401(k), a money market can help you continue to grow your nest egg. Once you have retired, you can use a money market to grow distributions you don’t need immediately.

Open a money market account at Citizens Bank

Citizens Bank has many types of savings accounts , each designed to help you meet your savings goals. If you want to grow your current nest egg or save for a long-term goal, consider opening a money market account. To get more information about money market accounts or other ways to save, speak with a Citizens Bank customer service representative.