A money market account is a type of deposit account that pays interest on deposits and allows withdrawals with some restrictions.
MMAs are offered primarily by banks and credit unions of all sizes, and can be used for short-term or long-term savings.
Some examples of common uses are:
- Emergency savings
- Money you’re putting away for a large purchase, such as a car or house down payment
- Money that’s not currently invested, but will soon be put into stocks, bonds or some other form of investment
MMAs share many features with standard savings and checking accounts. The main differences are that MMAs generally pay higher interest rates, require higher initial deposits and minimum balances, and limit the number of certain types of withdrawals and transfers.
Certificates of deposit, or CDs, also usually pay higher rates than standard savings or checking accounts. However, unlike MMAs, CDs