What is a money market account and how does it work

A money market account offers a middle ground between a savings account and a certificate. It gives you the potential to earn higher rates while still letting you access your money when needed. For many savers, a money market account is a flexible, safe way to save for future goals, build an emergency fund or keep cash available for major expenses.

What defines a money market account

A money market account is a deposit account offered by banks and credit unions that often earns a higher rate than a standard savings account while offering more access to your funds than a certificate of deposit (CD). It’s designed for savers who want to earn more on their balance without committing funds to a fixed term.

How does a money market account work

When you deposit money into a money market account, the institution uses those funds as part of its overall lending and savings activities. In return, you earn interest on your balance, typically at a higher rate than a regular savings account. The interest is added to your account periodically (often monthly)

You can deposit money at any time and access funds as needed, although some money market accounts have limits on certain types of transactions, such as the number of withdrawals or transfers per month.

Unlike  stocks and bonds, money market accounts are deposit accounts, so the money doesn’t fluctuate with the market. When held at an insured credit union or bank, the funds are protected up to federal insurance limits.

Benefits of a money market account

Higher interest rate potential

Money market accounts often earn more than standard savings accounts. That makes them appealing if you want your savings to grow at a better rate while still keeping funds accessible.

Flexible access to funds

With a CD, your money is typically locked in for a set term, and accessing it early may result in a penalty. A money market account, on the other hand, gives you more access to your savings while still earning a competitive rate.

Many money market accounts include features like check-writing, ATM or debit card access, and online transfers. That makes it easier to access funds if needed while still keeping them set aside for savings.

Safe and stable place to save

Because these accounts are deposit accounts held at federally insured institutions, your balance is protected up to insured limits. That makes a money market account a safer alternative to riskier investments for short- to medium-term savings.

Good for short-term and goal-based savings

Money market accounts work well when you have a defined savings goal or want to keep funds liquid for things like emergencies, a down payment, vacation or planned large purchase.

Things to watch out for with money market accounts

• Many money market accounts require a higher minimum balance than regular savings accounts to avoid fees or to earn the top interest rate.
• Some institutions limit the number of transactions per month (for example withdrawals or online transfers), which can reduce flexibility if you need funds often.
• Unlike CDs, which have a fixed rate for the full term, money market rates can change, so the amount you earn may go up or down over time.

Why choose Solarity for a money market account

At Solarity, our money market accounts are designed to help you grow your savings while keeping your funds accessible when you need them. You’ll earn a competitive rate in a secure, federally insured account without being locked into a fixed term.

For many members, a money market account with Solarity strikes a smart balance between earning more on savings and maintaining flexibility for future needs.

Who should consider a money market account

A money market account may be a good fit if you:

• Are saving for short- or medium-term goals like a down payment, emergency fund or major purchase
• Want to earn more than a standard savings account but still need flexibility and access
• Prefer a low-risk way to save rather than investing in volatile markets
• Maintain a balance high enough to meet any minimum requirements of the account

Conclusion

A money market account lets you earn more than a regular savings account while keeping your funds more accessible than a CD. It’s a flexible, low-risk way to grow your savings without committing to a fixed term.