An MMA account combines features from two other account types

An MMA account — short for Money Market Account — is a savings account that pays you interest on the money you deposit, with some features borrowed from checking accounts. The main difference from a regular savings account is that an MMA account usually pays a higher interest rate, but in exchange, the bank limits how often you can withdraw money each month.

Think of it as a middle ground. A checking account lets you withdraw money whenever you want but pays little or no interest. A traditional savings account pays interest but also limits withdrawals. An MMA account tries to do both: it pays better interest than checking, and it lets you write checks or make debit card purchases — but not as freely as a checking account would.

Banks offer MMA accounts because they want to hold onto your money longer. When you agree to limit your withdrawals, the bank can lend that money out more confidently, so they reward you with a higher interest rate.

Key Takeaways

  • An MMA account pays interest on your balance, usually higher than a regular savings account, in exchange for limiting how often you withdraw.
  • You can write checks and use a debit card with most MMA accounts, unlike traditional savings accounts.
  • Federal rules cap withdrawals at six per month, though some banks set lower limits or charge fees if you exceed them.
  • MMA accounts require a minimum opening deposit, which varies by bank and can range from a few hundred dollars to several thousand.
  • The interest rate on an MMA account changes over time and depends on what the Federal Reserve does with interest rates.

How the withdrawal limit works in practice

Federal banking rules used to cap all MMA withdrawals at six per month. That rule was relaxed in 2020, so now banks can set their own limits — and many have removed the cap entirely. However, some banks still enforce a six-withdrawal limit, and others charge a fee if you go over a certain number.

The limit usually counts transfers to another account, checks you write, and debit card purchases — but not ATM withdrawals or in-person withdrawals at the bank's branch. This is why an MMA account works better as a savings tool than a checking account: you can still access your money, but the friction of the limit discourages you from treating it like everyday spending money.

Before you open an MMA account, ask the bank directly what their withdrawal policy is. Some banks advertise "unlimited" withdrawals, while others still enforce the six-per-month rule. The answer matters if you think you'll need to move money in and out frequently.

Interest rates and how they change

An MMA account pays variable interest, meaning the rate the bank offers you can go up or down. The rate depends largely on what the Federal Reserve does with its benchmark interest rate. When the Fed raises rates, banks typically raise the rates they pay on savings accounts and MMA accounts. When the Fed lowers rates, banks lower what they pay you.

Right now, MMA rates vary widely by bank. Some online banks pay significantly more than brick-and-mortar banks, because online banks have lower overhead costs. A bank's rate also depends on how much money you deposit: some banks pay higher rates on larger balances.

The interest you earn is added to your account monthly or daily, depending on the bank. Over time, you earn interest on your interest — this is called compound interest. The more frequently interest compounds, the more you earn, though the difference is usually small.

Minimum deposit and account maintenance

Most banks require a minimum opening deposit to start an MMA account — the amount you must put in when you open it. This can be as low as $100 at some online banks or as high as $10,000 or more at some traditional banks. A few banks have no minimum at all.

Some banks also require you to keep a minimum balance — a certain amount that must stay in the account at all times. If your balance drops below that, the bank may charge a monthly fee or close the account. Others have no minimum balance requirement once the account is open.

Read the account agreement carefully before you open an account. The minimum deposit and minimum balance requirements vary so much from bank to bank that comparing them can save you money or frustration.

When an MMA account makes sense for you

An MMA account works well if you have money you want to save and earn interest on, but you might need to access it occasionally. It is not the right choice if you need to move money in and out constantly — that is what checking accounts are for. It is also not ideal if you have very little money to deposit, because the interest you earn might not be worth the minimum deposit requirement.

An MMA account can be a good fit if you are saving for a specific goal a few months or a year away — a car down payment, a vacation, or an emergency fund. The higher interest rate means your money grows a little faster than it would in a regular savings account, and the withdrawal limit helps you resist the temptation to spend it.

If you are comparing an MMA account to a high-yield savings account, know that high-yield savings accounts usually pay the same or better interest with no withdrawal limits. The main reason to choose an MMA account over a high-yield savings account is if you want the ability to write checks, which some people find useful.

MMA accounts versus other account types

A regular savings account is simpler: it has no withdrawal limits and no minimum balance, but it pays much less interest. An MMA account pays more interest but adds the withdrawal limit and usually a higher minimum deposit.

A checking account lets you write unlimited checks and make unlimited debit card purchases, but it pays little or no interest. Some checking accounts do pay interest, but the rate is almost always lower than an MMA account.

A certificate of deposit (CD) locks your money away for a set period — three months, one year, five years — and pays a fixed interest rate that does not change. In exchange, you cannot withdraw the money without a penalty. CDs usually pay more interest than MMA accounts, but you lose access to your money.

A high-yield savings account is very similar to an MMA account: it pays high interest and may have withdrawal limits. The main difference is that high-yield savings accounts usually do not offer check-writing or debit card access. If you do not need those features, a high-yield savings account often pays the same interest with fewer restrictions.

How to open an MMA account

Opening an MMA account is straightforward. You can do it online, by phone, or in person at a bank branch. You will need to provide your name, address, Social Security number, and identification. The bank will run a background check through a system called ChexSystems, which tracks banking history.

You will also need to decide how much to deposit to meet the minimum opening deposit. Some banks let you transfer money from another account, while others require you to send a check or wire the funds. Once the deposit clears, your account is active and you can start earning interest.

If you already have an account at a bank, opening an MMA account with the same bank is usually faster because they already have your information on file.

Frequently Asked Questions

Can I use my debit card to withdraw money from an MMA account?

Most MMA accounts come with a debit card, and debit card purchases usually count toward your monthly withdrawal limit. Some banks exclude ATM withdrawals from the limit, but in-person purchases at stores do count. Check with your bank about their specific rules.

What happens if I exceed the withdrawal limit?

If your bank still enforces a withdrawal limit and you go over it, they may charge a fee per excess withdrawal — typically $10 to $25 each. Some banks will straightforward decline the transaction. A few banks have removed the limit entirely, so no fee applies. Always ask before you open the account.

Is my money safe in an MMA account?

Yes, if the bank is insured by the FDIC (Federal Deposit Insurance Corporation). FDIC insurance protects up to $250,000 per account holder per bank. Most banks are FDIC-insured, but confirm this before you open an account. You can check a bank's FDIC status on the FDIC website.

Can I move money from my MMA account to my checking account?

Yes, transfers between your own accounts at the same bank usually do not count toward the withdrawal limit — or they count as only one withdrawal regardless of how many transfers you make. Rules vary by bank, so ask before you open the account if frequent transfers are important to you.

What is the difference between an MMA account and a money market fund?

An MMA account is a bank account insured by the FDIC. A money market fund is an investment product sold by brokerages, not insured by the FDIC, and carries some risk. They are completely different products despite the similar name. If a bank offers you an "MMA account," it is a bank account, not an investment.