Money market account vs. money market fund
The names are nearly identical, but these are different products with different protections. Mixing them up is the most common mistake people make in this category.
| Feature | Money market account (MMA) | Money market fund (MMF) |
|---|---|---|
| What it is | A deposit account at a bank or credit union | A mutual fund that buys short-term debt such as Treasury bills |
| Where you open it | Bank or credit union | Brokerage or fund company |
| Insurance | FDIC or NCUA, up to $250,000 per depositor, per ownership category, per institution | Not insured or guaranteed by the FDIC; you could lose money |
| What you earn | APY set by the bank, which can change at any time | Fund yield, which moves with short-term market rates minus the fund's expenses |
| Price | Your balance does not fluctuate | Most retail and government funds aim to hold $1.00 per share, but cannot guarantee it |
| Access | Transfers, often checks and a debit card; the bank may cap withdrawals | Sell shares; cash usually settles into your brokerage account |
Source: FDIC, "Understanding Deposit Insurance"; SEC Investor.gov bulletin "Focus on: Money Market Funds" (Nov. 2024); Vanguard money market fund disclosures.
The SEC's investor bulletin puts it plainly: money in a money market fund, "like money invested in any mutual fund, is not guaranteed by the FDIC." During market stress, a fund can also charge a liquidity fee when you redeem. Vanguard's fund disclosure carries the same warning: "You could lose money by investing in the Fund."
That does not make money market funds a bad choice. Government money market funds hold mostly cash and government securities. They are a common place to park cash inside an investment account. But if your goal is a guaranteed emergency fund, an insured money market account or savings account is the more direct fit.
Money market account rates: early October 2026 snapshot
These are advertised rates from banks that publish them online. All are variable. The "minimum" column shows what you need to open the account or to earn the top rate, whichever applies.
| Bank and account | APY (up to) | Minimum / monthly fee | Checks / debit card |
|---|---|---|---|
| Brilliant Bank Surge Money Market | 4.00% | $1,000 to open; $10 fee waived with $2,000+ balance | Yes / Yes |
| ZYNLO Bank Money Market | 3.90% | No monthly fee | No / No |
| EverBank Performance Money Market | 3.80% | No monthly fee | Yes / Yes |
| Quontic Bank Money Market | 3.80% | No monthly fee | Yes / Yes |
| CFG Bank High Yield Money Market | 3.80% | $1,000+ balance to earn APY; $10 fee waived at $1,000+ | No / No |
| Prime Alliance Bank Personal Money Market | 3.75% | No monthly fee | No / No |
| Redneck Bank Mega Money Market | 3.70% on balances up to $100,000 | $500 to open; $3 fee waived with paperless statements | Yes / Yes |
| Sallie Mae Money Market | 3.50% | No monthly fee | Yes / No |
| Vio Bank Cornerstone Money Market Savings | 3.45% | $100 to open; $5 fee waived with paperless statements | No / No |
| UFB Direct Portfolio Money Market | 3.26% | $5,000 balance to earn APY; $10 fee waived at $5,000+ | Yes / Yes |
| First Internet Bank Money Market Savings | 3.09% (3.64% above $1 million) | $5 fee waived at $4,000+ | No / Yes |
| Ally Bank Money Market | 3.10% | No minimum, no monthly fee | Yes / Yes |
Source: CNBC Select money market comparison (updated Sept. 29, 2026); Ally.com rates as of Oct. 5, 2026. The national average money market rate was 0.63% in September 2026 (FDIC data via FRED).
Reading the table
- Fees can erase the rate advantage. A $10 monthly fee is $120 a year. On a $2,000 balance that wipes out about 6 percentage points of yield. If you might dip below a waiver threshold, a no-fee account at a slightly lower APY can come out ahead.
- Some top rates are capped. Redneck Bank's 3.70% applies to balances up to $100,000. First Internet Bank pays more only above $1 million. Read the rate tiers.
- Not every MMA has checks. ZYNLO, CFG, Prime Alliance and Vio work like savings accounts. If you want to write checks from the account, Brilliant, EverBank, Quontic, Redneck, Sallie Mae, UFB and Ally offer them.
- Compare with savings. Some online banks pay the same rate on savings and money market accounts. Ally, for example, paid 3.10% on both in early October 2026. In that case, choose the MMA only if you will use the checks or debit card. Our high-yield savings guide has the current savings snapshot.
Withdrawal rules after the Regulation D change
For decades, federal Regulation D limited "convenient" transfers and withdrawals from savings and money market accounts to six per month. On April 24, 2020, the Federal Reserve issued an interim final rule to delete that six-per-month limit from the definition of a savings deposit. It made the change alongside cutting reserve requirements to zero.
The federal cap is gone, but banks may still set their own limits, and many do:
- Ally's money market account allows unlimited deposits and ATM withdrawals, plus 10 other transfers per statement cycle.
- Brilliant Bank's Surge account allows six free withdrawals a month and charges $1 for each one after that.
- Prime Alliance Bank allows six withdrawals or transfers a month, with unlimited deposits.
- ZYNLO advertises no transaction limits.
If you plan to pay bills straight from the account, check the limit and the per-transaction charge before you open it. Going over can cost you. Brilliant Bank, for example, charges $1 for each withdrawal past six a month.
What's driving money market rates right now
Money market account rates follow the federal funds rate, with a lag and at each bank's discretion. On September 16, 2026, the Federal Reserve raised its target range by a quarter point to 3.75%–4.00%, after holding at 3.50%–3.75% through its January–July meetings. The Fed's next scheduled decisions are October 28 and December 9, 2026.
Money market fund yields track short-term Treasury rates closely. Before the September increase, Crane Data's Crane 100 Money Fund Index showed a 7-day yield of 3.49% (week ended August 14, 2026). That was down from a 5.20% peak in November 2023. Money fund assets hit a record $8.404 trillion on July 6, 2026. Expect both fund yields and bank rates to keep shifting after each Fed decision, so a rate you see today is a snapshot, not a promise.
FDIC and NCUA coverage for money market accounts
Money market deposit accounts are explicitly covered by FDIC insurance, up to $250,000 per depositor, per ownership category, at each insured bank. Credit union money market share accounts get at least $250,000 of coverage from the NCUA. If you hold more than that, you can spread it across banks or use different ownership categories, such as a joint account. Money market funds, stocks, bonds and Treasury securities are not deposits and are not FDIC insured, even when you buy them through a bank.
Who a money market account suits
- Emergency funds you may need to tap quickly. A debit card or checks let you pay a large bill straight from the account. See our emergency fund guide for how much to keep.
- Short-term goals with flexible timing. Saving for a home repair or tax bill, where you want insured, liquid money and a market-level rate.
- People with large cash balances who want one account. Some MMAs pay their best rates on bigger balances.
It is a weaker fit if you can lock money away for a fixed term. A CD can guarantee a rate. Compare current offers in our CD rates guide. And if your cash is already inside an investment account, a brokerage money market fund may be more practical. Our broker comparison can help if you are choosing where to hold investments and cash together.
Taxes on money market earnings
Interest from a money market account is taxable as ordinary income in the year it is credited. The IRS says banks issue Form 1099-INT when you earn $10 or more, but you must report all taxable interest even if you do not receive a form. Tax-exempt (municipal) money market funds, which the SEC describes as focused on tax-advantaged income, are one option some higher-bracket savers consider for cash held in a brokerage account.
Frequently asked questions
Is a money market account the same as a money market fund?
No. A money market account is a bank or credit union deposit insured by the FDIC or NCUA up to $250,000 per depositor, per ownership category. A money market fund is a mutual fund sold by brokerages. According to the SEC, it is not guaranteed by the FDIC, and you could lose money.
What is a good money market account rate right now?
In early October 2026, published money market account rates at online banks ranged from about 3.1% to 4.0% APY, while the FDIC national average was 0.63% in September 2026. Rates are variable and changed after the Fed's September 2026 rate increase, so confirm on the bank's site.
How many withdrawals can I make from a money market account?
The federal six-per-month limit was removed in April 2020, but banks can set their own limits. For example, Ally allows 10 transfers per statement cycle plus unlimited ATM withdrawals, and Brilliant Bank allows six free withdrawals a month then charges $1 each.
Can you lose money in a money market account?
Not from market movements. Your balance does not fluctuate, and deposits are insured up to FDIC or NCUA limits. You can lose money to fees, such as monthly maintenance charges if your balance drops below the waiver amount.
Is a money market account better than a high-yield savings account?
It depends on how you use it. Many online banks pay similar or identical rates on both. Ally paid 3.10% on each in early October 2026. A money market account makes more sense if you want checks or a debit card on your savings.
Are money market accounts taxed?
Yes. Interest is taxable income. Banks send Form 1099-INT when you earn $10 or more in a year, and the IRS requires you to report all taxable interest even without a form.
Sources
- CNBC Select – Best money market accounts (updated Sept. 29, 2026)
- Ally Bank – Bank accounts and rates
- FRED / FDIC – National Rate: Money Market (MMNDR)
- Federal Reserve – Regulation D interim final rule (Apr. 24, 2020)
- Federal Reserve Bank of Atlanta – FOMC statement (Sept. 16, 2026)
- Federal Reserve – Implementation note (Sept. 16, 2026)
- FedRateCalc – FOMC meeting schedule 2026
- SEC Investor.gov – Focus on: Money Market Funds
- Vanguard – Money market funds
- Crane Data – Crane 100 MF Index flat at 3.49% (Aug. 17, 2026)
- FDIC – Understanding deposit insurance
- NCUA MyCreditUnion.gov – What is share insurance?
- IRS – Topic no. 403, Interest received
Rates, fees and terms change often. Figures were checked in October 2026; confirm current details with the provider before you apply.