A money market account is a savings account that typically offers higher interest rates than a regular savings account, but may have some restrictions.
In Depth
Money market accounts (MMAs) are a type of savings account offered by banks and credit unions. They usually pay a higher interest rate than traditional savings accounts in exchange for a higher minimum balance requirement. MMAs combine features of both checking and savings accounts, often allowing a limited number of transactions like checks or debit card use each month, while still being insured by the FDIC (for banks) or NCUA (for credit unions). They are a good option for holding emergency funds or short-term savings.
Example
Sarah opened a money market account to save for a down payment on a house, earning more interest than her regular savings while still being able to access the funds if needed.