Looking for a safe place to grow your savings without locking away your money? A money market account might hit the sweet spot.
These accounts combine the steady interest of a high yield savings account with limited features of a checking account—like debit card access and check-writing. They offer the security of a federally insured deposit account, a competitive interest rate and more flexibility than a standard savings account. The trade-off? They’re not built for everyday banking or frequent spending.
Here’s a closer look at how money market accounts work, their pros and cons, and what to know before opening one.
What Is a Money Market Account?
A money market account (MMA) is an interest-earning deposit account that blends features of both savings and checking accounts. Like a high yield savings account, it typically offers a competitive interest rate to help your money grow. But unlike standard savings accounts, MMAs often come with some limited check-writing privileges and debit card access—giving you more flexibility to use your funds.
Sure, it’s not built for daily swiping or impulse buys, but for smart savers who want access and growth? A money market account hits the mark.
How a Money Market Account Works
Money market accounts function as hybrid accounts: They’re designed for saving, but they give you some spending access. You can often make purchases or withdrawals directly from the account using a check or debit card, which can be convenient for larger purchases without the hassle of transferring money between accounts.
However, MMAs are not built for daily banking or everyday spending. Some MMAs may impose monthly limits on certain types of withdrawals or transfers, and exceeding those limits could lead to fees or account restrictions. So while you get more flexibility than with a traditional savings account, you still won’t have the same freedom as with a checking account.
Do money market accounts earn interest?
Yes! Money market accounts earn interest based on your account balance. Like other interest-bearing accounts, your earnings compound over time, helping your savings grow steadily over time.
What is the interest rate on a money market account?
Interest rates on money market accounts vary by financial institution and can change over time, but they’re generally higher than those offered by standard savings or checking accounts.
When you open an MMA, your financial institution typically quotes interest using the annual percentage yield (APY), which gives you a snapshot of how much you could earn in a year. Most MMAs offer variable interest rates, meaning your rate can rise or fall based on market conditions and other factors.
So, for example, if the Federal Reserve changes its benchmark interest rate (the federal funds rate), your bank or credit union may adjust your MMA rate in response.
How much interest do money market accounts earn?
It varies. Money market accounts are known for offering relatively competitive interest rates compared to those of traditional savings accounts. But exactly how much interest you earn depends on factors like your account balance, the financial institution you choose and current market conditions.
And remember: These are deposit accounts, not investment vehicles. So while your money grows with interest, it won’t deliver the kind of returns you’d expect from stocks or mutual funds. Depending on the bank and the terms, other deposit options—like high yield savings accounts or certificates of deposit (CDs)—may even offer better rates.
Wondering how to calculate interest on a money market account? Use our tool to compare current account rates and estimate your potential interest.
Money market account deposit and withdrawal rules
You can make unlimited deposits into a money market account, and withdrawals are generally allowed up to your full balance. Many MMAs support withdrawals through online banking, electronic funds transfers, checks or debit cards—though availability may vary by institution. Synchrony Bank’s Money Market Account, for example, allows you to write checks and withdraw money online, by phone or at ATMs.
While the federal limit on withdrawals and transfers from savings accounts was lifted in 2020, some banks and credit unions may still impose monthly limits or fees for excessive transactions. When comparing accounts, check the institution’s withdrawal policies so you’re not caught by surprise.
Money market account fees and minimum balance requirements
Depending on your financial institution, a money market account may require you to maintain a minimum balance—either to earn the advertised interest rate or to avoid monthly maintenance fees. These requirements can vary widely, so read the fine print before opening an account.
With Synchrony Bank’s Money Market Account, there’s no minimum balance requirement to open an account and no monthly fees—making it a flexible, low-cost option for savers who want to earn interest without jumping through hoops.
How To Choose the Right Money Market Account
When selecting a money market account, start by asking yourself:
- How often will I need to withdraw or transfer money?
- What will my starting balance be?
- Am I saving for a short-term or medium-term goal?
These questions will help you narrow down your options. For example, if you’re starting with a smaller balance, avoid MMAs with high minimum balance requirements that could trigger fees or penalties. If you plan to make regular withdrawals, check whether the account allows multiple transactions per month without penalties.
Other important factors to consider include:
- Interest rate: Look for a competitive APY, but make sure it’s not offset by fees.
- Fees: Monthly maintenance fees can eat into your earnings, so choose an account with minimal or no fees.
- FDIC insurance: Make sure the account is backed by a federally insured financial institution.
The bottom line: The right MMA strikes a balance between earning potential, access and low cost—offering helpful features like debit card access or check-writing without unnecessary fees or restrictions.
Steps To Open a Money Market Account
The process is straightforward, but the steps may vary slightly depending on whether you’re a new or existing Synchrony Bank customer.
If you’re a new Synchrony Bank customer
Opening a money market account is quick and easy with Synchrony Bank’s online application. You’ll need to provide some basic personal information—like your name, address and Social Security number—and the process typically takes just a few minutes.
LEARN MORE: Need help? Call 1-866-226-5638 to speak with a personal banker.
If you’re already a Synchrony Bank customer
Log in to your online banking account and follow the prompts to open a new money market account. Once the account is created, you can fund it instantly by transferring money from an existing Synchrony Bank account. Or you can link an external account to transfer funds from another bank.
Build Your Future With a Money Market Account Today
Money market accounts are ideal for storing short-term and medium-term savings that you want to keep accessible while maximizing your interest earnings.
These accounts are also a smart option for holding extra cash you’re not ready to invest. If you have funds set aside but aren’t sure where to put them, a money market account lets you earn interest in a safe, flexible account while you consider your options.
You’ll be hard-pressed to find a more versatile savings option than a money market account. This could be your ideal account if you’re searching for a flexible, low-hassle savings account that still offers a solid interest rate.
READ MORE: The Pros and Cons of Money Market Accounts
