Money Market

Money market accounts (MMAs) offer customers an attractive way to earn more interest on their money. MMAs are a useful and convenient vehicle to earn interest on money that might be needed in the near future providing greater access to your funds than a CD, for example. Some examples are putting money aside for quarterly tax payments, an emergency fund, saving up for home improvements or accumulating funds to make a special purchase. MMAs are a good place to park funds if current rates on certificates of deposit are not attractive, and you believe that rates are going to go up.

However, the benefit of the more favorable interest rates on MMAs come with specific conditions.

Interest Rates

An MMA pays slightly higher interest rates which fluctuate based on market conditions. Money market rates will typically be higher than the interest earned on a checking account and higher than the return on a high yield savings account. Interest is calculated on a daily basis on the actual balance and credited to the account monthly. If the balance falls below $2,000, a reduced rate will be paid on the lower balance.

Depending on market conditions, money market rates on an MMA can sometimes be higher than the rate on a short-term certificate of deposit.

Minimum Amount to Open a Money Market Account

The minimum amount to open an MMA is higher than a high yield savings account. The minimum amount to open an MMA is $2,000, whereas, the minimum to open a savings account is $25. High interest savings accounts do not have a minimum opening amount if you set up the account with Direct Deposit or Payroll Deduction.


With an MMA, there are restrictions on the number and amount of withdrawals that are allowed. Up to six withdrawals or transfers can be made per month without penalty, and the minimum amount of each withdrawal must be at least $500. High interest savings accounts does not have these restrictions, since you can make withdrawals at any time and for any amount.

An MMA is different from a certificate of deposit (CD). Withdrawals can be made from an MMA at any time; funds deposited into a CD will only be available at the maturity date of the CD, unless you pay a penalty for early withdrawal.

Check Writing

An MMA does not have check writing privileges.


Money market accounts is risk-free. All MMAs are fully insured by the federal government up to $250,000 through the National Credit Union Association (NCUA).

Difference Between an MMA and a Money Market Fund

A money market fund (MMF) is an interest-bearing account that is offered by an investment firm. The interest return on an MMF fluctuates daily based on market conditions but an MMF is also exposed to changes in market value. While it may be rare, it is possible to actually lose money on an MMF. An MMA with a credit union does not have this market risk. Whatever amount of money you put into an MMA will always be there. MMFs are also not federally insured.