What is the primary difference between a money market account and a savings account?

The primary difference is that money market accounts typically offer higher interest rates and may include limited check-writing or debit card access, while traditional savings accounts generally have lower interest rates and fewer transactional features. Both are federally insured.

Are money market accounts safe?

Yes, money market accounts are very safe. They are deposit accounts insured by the FDIC (for banks) or NCUA (for credit unions) up to $250,000 per depositor, per institution, for each ownership category. This means your principal is protected even if the financial institution fails.

How much interest can I expect to earn on a money market account in 2026?

As of early 2026, competitive money market accounts, particularly those offered by online banks, are paying annual percentage yields (APYs) ranging from 4.00% to 5.25%. Rates are variable and can change based on market conditions.

Can I write checks from a money market account?

Many money market accounts offer limited check-writing privileges. However, financial institutions typically impose limits on the number of "convenient" transactions (including checks, debit card purchases, and electronic transfers) you can make per statement cycle, often around six.

What is the typical minimum balance for a money market account?

Minimum balance requirements vary widely by institution. Some online banks may offer MMAs with no minimum balance, while others might require anywhere from $1,000 to $10,000 or more to open the account, avoid fees, or earn the highest advertised interest rate.

Are money market accounts suitable for an emergency fund?

Yes, money market accounts are an excellent choice for an emergency fund. They offer a good balance of competitive interest rates, federal insurance protection, and sufficient liquidity to access your funds when needed, making them ideal for holding readily available cash.

Do I have to pay taxes on money market account interest?

Yes, the interest earned on a money market account is considered ordinary income by the IRS and is subject to federal, state, and local income taxes. Your financial institution will typically send you a Form 1099-INT if you earn $10 or more in interest during the year.

Money Market Account Guide: Rates, Safety & How They Work |…