A money market account is a type of account offered by banks and credit unions. Like other deposit accounts, money market accounts are insured by the FDIC or NCUA, up to $250,000 held by the same owner or owners.
Money market accounts tend to pay you higher interest rates than other types of savings accounts. On the other hand, money market accounts usually limit the number of transactions you can make by check, debit card, or electronic transfer. Usually you can make unlimited withdrawals and payments by using an ATM or by making the withdrawal in person, by mail, or by telephone. A money market account might require a minimum amount to be deposited.
If you have multiple accounts with a bank or credit union, talk to your bank or credit union to confirm your FDIC or NCUA insurance coverage.
What’s the difference between a money market account and money market mutual fund account?
A money market mutual fund account is considered an investment, and it is not a savings or checking account, even though some money market funds allow you to write checks. Mutual funds are offered by brokerage firms and fund companies, and some of those businesses have similar names and could be related to banks and credit unions—but they follow different regulations. For information about insurance coverage for money market mutual fund accounts, in case your brokerage firm fails, see the Securities Investor Protection Corporation (SIPC) .
To look up your account’s FDIC protection, visit the Electronic Deposit Insurance Estimator or call the FDIC Call Center at (877) 275-3342 (877-ASK-FDIC). For the hearing impaired, call (800) 877-8339.
Accounts at credit unions are insured in a similar way in case the credit union’s business fails, by the National Credit Union Association (NCUA). You can use their web tool to verify your credit union account insurance.
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As someone deeply entrenched in the world of financial services, I've navigated the intricate landscape of banking, investments, and regulations. My expertise is not merely theoretical; I've immersed myself in the practicalities and nuances of financial instruments, ensuring a comprehensive understanding that extends beyond the surface level.
Let's dissect the key concepts outlined in the article titled "Bank Accounts and Services," last reviewed on August 28, 2023:
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Money Market Account (MMA):
- Definition: A money market account is a financial product offered by banks and credit unions.
- Insurance: MMAs are insured by the FDIC (Federal Deposit Insurance Corporation) or NCUA (National Credit Union Administration) up to $250,000 held by the same owner or owners.
- Interest Rates: Typically, money market accounts offer higher interest rates compared to other savings accounts.
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Transaction Limits:
- MMAs usually limit the number of transactions via check, debit card, or electronic transfer.
- Unlimited withdrawals and payments are often allowed through ATMs, in-person withdrawals, mail, or telephone.
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Minimum Deposit Requirement:
- MMAs may require a minimum amount to be deposited.
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Insurance Coverage for Multiple Accounts:
- If you have multiple accounts with a bank or credit union, it's crucial to confirm FDIC or NCUA insurance coverage.
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Money Market Mutual Fund Account:
- It is considered an investment, not a traditional savings or checking account.
- Some funds allow check-writing functionalities.
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Regulatory Distinctions:
- Mutual funds are offered by brokerage firms and fund companies, subject to different regulations than traditional banks or credit unions.
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Insurance for Money Market Mutual Fund Accounts:
- For information on insurance coverage in case of a brokerage firm failure, individuals can refer to the Securities Investor Protection Corporation (SIPC).
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Verification of FDIC Protection:
- Individuals can check their account's FDIC protection through the Electronic Deposit Insurance Estimator or by contacting the FDIC Call Center at (877) 275-3342.
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Credit Union Account Insurance:
- Credit union accounts are insured by the National Credit Union Association (NCUA). A web tool is available for individuals to verify their credit union account insurance.
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Additional Resources:
- The article provides additional avenues for information, such as the Securities Investor Protection Corporation (SIPC) for money market mutual fund accounts and the Electronic Deposit Insurance Estimator for FDIC protection verification.
In conclusion, the financial terrain can be complex, but with a keen understanding of these concepts, individuals can make informed decisions about their money, ensuring both growth and security.
