Money Market Account

A money market account is a type of savings account offered by banks and credit unions that typically pays higher interest rates than traditional savings accounts.

Money market accounts are similar to savings accounts in that they offer a safe place to deposit funds, but they may require a higher minimum deposit and may have restrictions on the number of withdrawals that can be made each month.

Money market accounts typically invest the deposited funds in low-risk, short-term debt securities, such as government bonds, and the interest rate paid to the account holder is based on the current market rate for those securities.

Money market accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to a certain amount, currently set at $250,000 per depositor, per insured bank. Some money market accounts also offer additional features, such as check writing or ATM access.

Money market accounts are often used by individuals who want to save for short-term goals or as an alternative to a checking account that offers a higher interest rate.