A money market account, called a money market deposit account (MMDA) in banking rules, is a savings-type deposit offered by banks and credit unions. The CFPB describes it as generally paying more than a standard savings account while usually limiting the number of transactions by check, debit card or electronic transfer. The rate is variable and is quoted as an APY.
Because it is a deposit, it is covered by deposit insurance: the FDIC lists money market deposit accounts among covered deposits, up to $250,000 per depositor, per insured bank, for each ownership category. It is not the same as a money market fund, which is an investment.
Formula
Interest for one year = balance × APY. Over several years: balance × (1 + APY)^years, if the rate and balance stay the same.
Example
The FDIC national average for money market accounts was 0.63% in October 2026. $10,000 at 0.63% earns $10,000 × 0.0063 = $63 in a year and $318.99 over five years. At an example 4.00% APY, the same $10,000 earns $400 in a year.
The money market calculator adds monthly deposits and tax, and the guide money market account vs savings account compares the two accounts feature by feature.
Common mistakes
- Assuming the account type guarantees a higher rate: many savings accounts pay more than many money market accounts.
- Ignoring the minimum balance: a monthly fee can exceed the interest on a small balance.