What is a Money Market Account?

The Benefits of Money Market Accounts

With higher interest rates than standard checking and savings accounts and the convenience of debit card and check-writing privileges, money market accounts can be a convenient alternative to typical savings vehicles. MMAs may be a better choice than CDs if you need easy access to the money; for example, as part of your emergency fund or for a down payment on a home.

A money market account might be particularly attractive for those uncomfortable with the risk associated with securities investing — or for retirees who need to hold some money in cash for shorter-term living expenses. MMAs can also be a stable option for a large sum as you decide whether and how to invest it.

Because you can access an MMA at any time, it's a good place to put money that you might need at an unspecified point in the future.

Money Market Accounts Versus Money Market Funds

You may have also heard of a money market fund, but it's different from a money market account. Money market accounts are bank accounts that you can deposit money into as a form of savings. Deposits of up to $250,000 (per depositer) into MMAs at an FDIC-insured bank2 will not decrease with market fluctuations, and they will generate additional income as interest.

By contrast, money market funds are investments sold by investment firms and other non-bank vendors that aren't insured by the FDIC.

To distinguish between MMAs and money market funds, MMAs are also sometimes called money market deposit accounts or money market savings accounts.

When Money Market Accounts Are Not the Right Fit

MMAs often charge fees if you dip below the minimum balance. You also could be charged a fee if you make more than six of certain kinds of withdrawals or transfers per month. Because of these stipulations, you need to keep track of your activity, which some might find burdensome.

MMAs also sometimes require higher initial deposits and minimum balances3 than standard checking or savings accounts, making them more suitable for people with larger sums, such as $10,000.4

Opening a Money Market Account

Before you open a money market account, take the time to understand the requirements around the initial deposit, minimum balance, and allowed number of transactions per month. If these are not daunting to you, and you want to grow your money in a protected account, opening an MMA could be a wise decision.

To learn about our money market account options, visit your local Synovus branch.