What is a money market account?
Money market accounts are deposit accounts offered by financial institutions. They generally have yields that beat traditional savings accounts and interest-bearing accounts. For example, as of June 16, 2025, the average savings account rate is 0.38%, according to the Federal Deposit Insurance Corporation (FDIC). Interest-bearing checking accounts yield 0.07%. Compare those rates to the average rate for a money market account, which is 0.59%. It’s possible to find higher yields by comparing accounts from local and national institutions.
Generally, money market accounts combine the higher yields associated with savings accounts with the access and transaction abilities of a checking account.
A money market account differs from a money market mutual fund, which is a security and not a deposit account. Money market mutual funds are considered relatively safe investments, but they aren’t covered by FDIC insurance. Instead, the firms that offer them are covered by insurance from the Securities Investor Protection Corporation (SIPC).
How does a money market account work?
Like many other deposit accounts, a money market account allows you to keep your money in a financial institution, usually a bank or credit union. When you deposit money in one of these accounts, it’s protected by the FDIC or its parallel organization, the National Credit Union Administration (NCUA).
The financial institution pays you interest, expressed as an annual percentage yield (APY), for keeping your money in the account. The bank or credit union can use your deposit to lend to borrowers. To profit, the bank charges a higher interest rate to the borrower than it pays to you.
Money market accounts might have various features, including debit card access, mobile app and money management tools. Additionally, some money market accounts might limit certain transactions or require a minimum balance. Review opening deposit requirements and potential balance tiers to earn the top advertised yield.
Best money market account rates for June 2025
Compare yields from online and brick-and-mortar banks and consider local institutions as well:
- First Service Bank: 5.04% (no balance requirement)
- TotalBank: 4.41% ($2,500 required to earn the APY)
- ZYNLO Bank: 4.40% (no balance requirement)
- Brilliant Bank: 4.35% ($1,000 required to earn the APY)
- CFG Bank: 4.32% ($1,000 opening deposit)
The best money market account rates are from DepositAccounts.com, which analyzes thousands of financial institutions. Money market account choices focus on those requiring $5,000 or less as an opening deposit.
Money market account vs. other savings options
As you consider whether a money market account is right for your financial goals, compare it to other savings products.
Money market account vs. high-yield savings account
A high-yield savings account is one that offers a higher rate of return than the national average. High-yield money market accounts also offer above-average yields.
For example, the top 1% of savings accounts have an average rate of 4.18% APY in June 2025, according to DepositAccounts.com. Money market accounts have slightly lower yields, with the top-yielding accounts averaging 4.03% APY.
Some high-yield savings accounts don’t offer debit card access and might have limits on withdrawals. On the other hand, money market accounts usually have debit card access and the ability to make daily transactions, although there might be limitations on some transactions.
Money market account vs. checking account
Checking accounts are designed for daily money management transactions. While money market accounts might have limits on withdrawals and certain transactions, checking accounts usually don’t limit withdrawals and transactions.
However, it can be difficult to find a checking account that pays a higher yield. While the top 1% of interest-bearing checking accounts pay 3.71%, some might have high minimum balance requirements to maintain that yield.
Money market account vs. certificate of deposit (CD)
CDs are timed deposits, meaning you must keep your money in the account for a set period of time. If you withdraw the money early, you normally pay a penalty.
Money market accounts don’t usually place a time requirement on your deposit. However, because you don’t have that restriction, a high-yield CD might pay a much better interest rate. The top 1% of CDs pay 4.63% APY, according to DepositAccounts.com.
If you don’t need access to your money for several months, you might be able to boost your earnings by keeping it in a CD instead of a money market account.
How to open a money market account
If you decide to open a bank account, including a money market account, you need to carefully read through the account requirements and provide government-issued identification. Check with the financial institution to determine what documents and information are needed.
Choosing the right bank or credit union
Compare three to five banks and credit unions to determine which works best for you. While APY is important, consider other features, such as access to fee-free ATMs, whether you’re near a brick-and-mortar branch and available money management tools.
Your financial style is an important factor in which bank or credit union you choose. Additionally, you can ask your current financial institution if it offers money market accounts and whether there are any special features for account holders who open another account.
Minimum deposit and balance requirements
Some financial institutions require a minimum opening deposit. Depending on the institution, it can be as little as $5 or as much as $1,000 or more. Review your budget to determine whether you can meet the deposit requirements.
You might also be subject to balance requirements. Some institutions charge a fee if you fall below an average daily balance. Others might not charge a fee, but you might not qualify for the highest interest rate if you don’t meet a balance requirement. Before you open an account at the institution with the highest APY, verify whether you need to maintain a minimum balance to qualify for the advertised rate.
Withdrawal restrictions and limits
Because some money market accounts offer higher yields, they might place withdrawal restrictions and limits. You might face limitations on the number of debit transactions and electronic transfers. Some money market accounts also restrict withdrawals.
Understand your financial habits and the transactions you expect to make with the account before opening a money market account.