Pros And Cons Of Money Market Accounts

A money market account is a deposit account that earns interest while providing easier access to your cash than traditional savings accounts. You can find money market accounts, also known as MMAs, at banks and credit unions nationwide.

These accounts combine the best features of savings and checking accounts. Similar to a savings account, money market accounts earn interest and help your money grow over time. You can often find competitive annual percentage yields (APYs), though there may be limits on how many withdrawals you can make per month.

Similar to a checking account, you may be able to write checks with an MMA or make purchases and withdrawals with a debit card. While it’s possible for savings accounts to offer these features, it’s rare and more common for money market accounts to provide this flexibility.

Understanding what a money market account is and how it functions is the first step in deciding if it’s right for your financial goals.

What are the advantages of money market accounts?

Money market accounts offer several compelling benefits that make them attractive options for certain financial goals.

MMAs earn interest

Because MMAs earn interest, they’re an excellent tool to grow your money while maintaining access to it. As of Nov. 6, 2025, the average money market account rate is currently 0.46 percent, according to Bankrate data. However, you can do much better by shopping around.

The best money market rates are significantly higher than the average, with some topping 4 percent. These competitive yields help your savings grow faster than traditional savings accounts while keeping your funds accessible when you need them.

Bankrate Insight: Rate shopping pays off

Don’t just settle for average rates. The difference between a 0.46 percent average rate and a 4+ percent high-yield rate can mean hundreds of dollars in additional earnings on a $10,000 balance over just one year.

Compare Bankrate’s highest money market account rates.  

You have easy access to cash

You don’t have to jump through hoops to withdraw money from a money market account when you need it. This liquidity makes money market accounts ideal for emergency funds and short-term savings goals.

Many money market accounts come with debit cards for ATM access and check-writing privileges. While there could be a limit of six withdrawals per statement period, this still provides more flexibility than certificates of deposit or other time-locked savings products.

Compare the differences between money market accounts, CDs and savings accounts.

Money is protected by federal insurance

At federally insured institutions, you don’t have to worry about the safety of funds in a money market account, up to coverage limits. Provided the bank or credit union has insurance from the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA), respectively, up to $250,000 per depositor and per account ownership type is protected even if the institution fails.

Check-writing and debit card potential

One of the biggest advantages of money market accounts is their transaction flexibility. Unlike most savings accounts, many MMAs provide check-writing capabilities and debit card access, making them more versatile for your financial needs.

Check writing allows you to pay bills directly from your money market account, which can be particularly useful for large expenses like rent or contractors where checks are preferred payment methods. Debit card access lets you make purchases or withdraw cash from ATMs when needed, offering additional convenience.

What are the disadvantages of money market accounts?

Money market accounts have three primary disadvantages: minimum balance requirements to earn top rates, potential monthly maintenance fees and transaction limits that restrict withdrawals. While money market accounts offer many benefits, understanding these limitations helps you determine if they suit your situation.

Better rates may be available elsewhere

While the best money market accounts offer competitive earning potential, you might find higher interest rates with other savings products, though you may have to make trade-offs.

For example, you could earn just as much, if not more, in interest with a high-yield savings account, but you likely wouldn’t get checks or a debit card to spend your funds directly from the account.

To see how a $10,000 deposit compares in high-yield savings accounts vs. money market accounts, check out Bankrate’s earnings comparison.

You could also potentially earn more with a high-yield certificate of deposit, but CDs require a time commitment. You agree to lock up your funds for a certain period in exchange for a guaranteed APY, which eliminates the flexibility that makes money market accounts attractive.

Minimum balance requirements to earn a high rate

Most money market accounts have fairly low minimum balance requirements to open an account — sometimes as little as $0. However, to earn the interest rate that caught your attention, you might need a significant deposit.

Some banks and credit unions require $100,000 or more to earn their highest advertised rates. This can make money market accounts less accessible for those just starting to build their savings or working with smaller balances. Other accounts have tiered rates, where smaller balances earn much lower than the advertised rate.

Rate tiers typically work like this:

• $0-$9,999: Lower APY
• $10,000-$24,999: Mid-tier APY
• $25,000+: Highest advertised APY

Always check the rate structure before opening an account to ensure you can realistically meet the requirements for the rate you want.

Banks may charge monthly fees

Monthly service fees can quickly erode your interest earnings if you’re not careful. Some money market accounts charge $10-$25 per month in maintenance fees, which could completely offset the interest you earn on smaller balances.

However, many accounts offer ways to waive these fees by maintaining a certain minimum balance or setting up direct deposits. When shopping for accounts, look for money market accounts that charge no monthly fees or make fee waivers easy to achieve.

Here are a couple of common ways to avoid fees:

• Choose accounts with no monthly fees
• Maintain minimum balances to waive fees
• Set up qualifying direct deposits
• Use online banks, which typically have lower fees

When should you open a money market account?

The combination of safety, liquidity and yield makes money market accounts excellent candidates for several key pieces of your financial portfolio.

• Your emergency fund: Money market accounts are ideal for an emergency fund because they keep your safety net accessible while earning interest. The check-writing ability can be particularly valuable for large emergency expenses like major home repairs.
• Your short-term savings goals: Whether you’re saving for a vacation, wedding or down payment, money market accounts provide a safe place to accumulate funds while earning interest. The debit card access makes it easy to use saved funds when you’re ready to make purchases.
• Your tax payments: For independent contractors and freelancers, money market accounts offer an excellent way to separate tax money from spending money. You can earn interest on funds earmarked for quarterly tax payments while keeping them easily accessible.
• Your next big purchase: When saving for a car, appliance or other major purchase, money market accounts allow you to write a check directly when you’re ready to buy, eliminating the need to transfer funds between multiple accounts.

While online high-yield savings accounts and CDs are also options for these goals, money market accounts might be better when you need frequent access or want payment flexibility.

Money market account vs. savings account: Which earns more?

When deciding between money market accounts and savings accounts, consider your priorities around access, features and rates.

Transaction capabilities: Unlike most savings accounts, money market accounts typically provide check-writing privileges and debit card access. If you don’t need these features, a standard high-yield savings account might offer similar or better rates with fewer restrictions.

Interest rates: Both account types can offer competitive yields, but some of the best savings account rates currently exceed money market rates. Compare specific offerings rather than assuming one type always pays more.

Minimum balance requirements: Money market accounts often have higher balance requirements to earn the best rates, while many high-yield savings accounts offer top rates regardless of balance size.

Money market account vs. money market fund: What’s the difference?

Despite their similar names, money market accounts and money market funds are completely different products with distinct risk profiles and features.

Money market accounts are bank deposit products insured by the FDIC or NCUA up to $250,000 per depositor. They function like hybrid savings-checking accounts with guaranteed principal protection and modest, stable returns.

Money market funds are investment products offered by brokerages and mutual fund companies. These funds invest in short-term, low-risk securities like Treasury bills and commercial paper. While they typically offer higher potential returns than money market accounts, they come with important differences:

Money market funds aren’t suitable for emergency funds or money you can’t afford to lose, as their value can decline during market stress. Money market accounts provide the safety and guaranteed access that most savers need for their short-term goals.

How to find the best money market account rates

Shopping around for money market accounts can significantly impact your earnings. Here’s how to maximize your returns:

• Compare current rates: Bankrate tracks money market rates from hundreds of financial institutions daily. The best money market accounts currently offer rates 8-10x higher than the national average.

• Understand tier structures: Many banks offer different rates based on your balance. A $10,000 deposit might earn 0.50% APY, while $25,000+ could earn 4.00% APY at the same institution. Always check which tier your balance falls into before opening an account.

• Consider online banks: Online-only banks typically offer the most competitive money market rates because they have lower overhead costs than traditional banks. These institutions are FDIC-insured and provide the same protections as brick-and-mortar banks.

• Check fee structures: Even a high rate can be eroded by monthly maintenance fees. Look for accounts with no monthly fees or easily waivable fee requirements.

Bottom line 

Money market accounts offer a combination of safety, growth potential and accessibility that makes them valuable tools for specific financial goals. The ability to earn competitive interest while maintaining check-writing and debit card privileges provides flexibility that pure savings accounts can’t match.

For emergency funds, short-term savings goals and money you need occasional access to, money market accounts can be excellent choices. Just make sure the account you choose aligns with your balance expectations and access needs.

Next steps: Ready to find the right money market account? Compare Bankrate’s best money market accounts to see current rates and features.