Definition: Money Market Account (MMA)


A money market account (MMA), otherwise known as money market deposit account (MMDA), is a higher interest-bearing account offered by financial institutions to entice their clients into making deposits. 

These accounts usually require a higher minimum balance than standard savings or checking accounts, and there are several limitations on how often the funds can be tapped.

Money market accounts base the interest rate paid on the average or prevailing rates offered in the money market, where short-term commercial paper is traded between dealers. 



Money market accounts are a good fit for bank clients who like having the check-writing ability, like a checking account with a higher interest-bearing investment such as a money market fund.

What is Money Market Account

Image Source: What is Money Market Account?

US banking regulators consider a money market account as a deposit account; thus it is subject to the same regulations existing for savings accounts such as limited withdrawal transactions to third parties allowed every month. 

Banks will impose very harsh fees to dissuade clients from overreaching these thresholds.

Money market accounts are available at almost every retail financial institution and pay higher rates than other savings accounts, although they are usually more restrictive in use and in minimum balances. 

Similar to the interest earned through a checking account, the interest earned through a money market account is taxable.



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