What is a money market account?
A money market account (MMA) is an interest-bearing deposit account at a bank or credit union that blends features of savings and checking: it earns a variable interest rate like a savings account and may allow limited check-writing or debit access. At an FDIC-member bank, balances are insured up to $250,000 per depositor, per bank, per ownership category.
Because it is a bank deposit product — not an investment — the money you deposit is not exposed to market movements the way invested funds are, and the interest rate it pays is variable and can change over time.
How does a money market account work?
You deposit money into the money market account, and the balance earns interest, usually expressed as an annual percentage yield (APY). Interest typically compounds over time, and the rate is variable — it can rise or fall based on the bank’s decisions and broader interest-rate conditions.
Money market accounts may come with conditions that a basic savings account may not:
- Minimum balance requirements — some accounts require a minimum to open, to earn the stated APY, or to avoid a monthly fee.
- Tiered rates — higher balances sometimes earn a higher APY.
- Withdrawal limits — some accounts limit the number of certain withdrawals or transfers per statement cycle.
Because fees and minimums can offset a higher rate, the stated APY is only one part of the picture.
Money market account vs. savings account
While money market accounts and savings accounts are both interest-bearing bank deposit accounts, and both can be FDIC-insured at member banks, they each have practical differences:
| Money market account | Savings account | |
| Access | May offer check-writing or a debit card | Usually no check or debit access |
| Minimums | Sometimes higher to earn the top rate | Often low or none |
| Rate (APY) | Variable; not automatically higher | Variable; not automatically higher |
| FDIC insurance | Eligible at member banks, up to limits | Eligible at member banks, up to limits |
| Principal | Deposit product; no market risk | Deposit product; no market risk |
Neither is universally better; the right choice depends on how you plan to access the money and the specific terms each account offers. If you are weighing an MMA against a high-yield option, our guide to high-yield savings accounts breaks down that comparison.
Money market account vs. money market fund
Money market accounts and money market funds sound alike but are fundamentally different products:
| Money market account | Money market fund | |
| Product type | Bank deposit account | Investment (a type of mutual fund) |
| Regulation | Bank/deposit rules | SEC-regulated security |
| FDIC insurance | Eligible at member banks, up to limits | Not FDIC-insured |
| Principal | Does not fluctuate with the market | Can lose value; yield not guaranteed |
| Where you hold it | At a bank or credit union | Inside a brokerage or investment account |
If FDIC protection matters to you, confirm whether a product is an account (deposit) or a fund (investment) before you move money — the labels are easy to confuse.
Are money market accounts FDIC insured?
A money market account held at an FDIC-member bank is generally insured up to $250,000 per depositor, per bank, per ownership category — the same protection that applies to savings and checking accounts. That coverage is provided by the member bank through the FDIC. A money market fund, by contrast, is an investment and is not FDIC-insured.
What are money market account rates?
Money market account rates are variable and differ widely by institution, so it helps to compare current rates rather than rely on a fixed figure. You can check the national average deposit rates published by the FDIC on its National Rates and Rate Caps page.
An MMA rate can rise or fall over time, and the headline APY is only part of the picture — fees or minimums can reduce your effective return, and interest may not keep pace with inflation.
Where a cash account fits with M1
M1 does not offer a money market account. For cash, M1 offers a High-Yield Cash Account (HYCA) through M1 Earn, with a variable APY. Your cash is protected by SIPC while held in your M1 brokerage account; once swept to M1’s partner banks, it’s eligible for FDIC insurance up to applicable limits, provided by those banks rather than by M1. A $3 monthly platform fee applies, waived when your total M1 assets — including your cash — reach $10,000.
Frequently asked questions about money market accounts
When a money market account is held at an FDIC-member bank, deposits are generally insured up to $250,000 per depositor, per bank, per ownership category. A money market fund, by contrast, is an investment and is not FDIC-insured. Coverage limits and conditions apply.
No. A money market account is a bank deposit product eligible for FDIC insurance; a money market fund is an SEC-regulated investment that is not FDIC-insured and can lose value.
Both are interest-bearing deposit accounts that can be FDIC-insured, but a money market account may offer limited check or debit access and sometimes carries higher minimums. Rates on both are variable.
Both are variable-rate deposit accounts that can be FDIC-insured, so the deciding factors are usually access and terms, not the label. A money market account more often includes check-writing or debit access, while a high-yield savings account is built purely for saving — so compare the actual APY, minimums, fees, and access on the specific accounts you’re weighing.
A money market account at an FDIC-member bank does not lose principal within insurance limits, though fees or a falling rate can reduce your return, and interest may not keep up with inflation. A money market fund, being an investment, can lose value.
Educational information only, not financial advice. Investing involves risk, including the possible loss of principal. Money market accounts are bank deposit products; money market funds are investments and are not FDIC-insured. M1 does not offer a money market account. FDIC insurance is provided by member banks, not by M1. APY is variable and subject to change. A platform fee and other fees apply; see the M1 Fee Schedule.
M1 High-Yield Cash Account(s) is an investment product offered by M1 Finance, LLC, an SEC registered broker-dealer, Member FINRA / SIPC. M1 is not a bank and M1 High-Yield Cash Accounts are not a checking or savings account. The purpose of this account is to invest in securities, and an open M1 Investment account is required to participate in the M1 High-Yield Cash Account. All investing involves risk, including the risk of losing the money you invest. The cash balance in your Cash Account is eligible for FDIC insurance when it is swept to our partner banks and out of your brokerage account. Unless the cash balance is swept to partner banks, they are no longer held in your brokerage account and are not protected by SIPC insurance. FDIC insurance is not provided until the funds participating in the sweep program leave your brokerage account and into the sweep program. FDIC insurance is applied at the customer profile level. Customers are responsible for monitoring their total assets at each of the sweep program banks. A complete list of participating program banks can be found here.
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