What Is a Money Market Account?

What is a money market account?

A money market account is a savings account that earns interest while offering convenient access to your money. It may pay more than a traditional savings account, although minimum balance requirements and transaction rules vary. At credit unions, these earnings are called dividends. Whether you’re building an emergency fund or setting money aside for a big purchase, a money market account can help you save while keeping funds available when you need them.

How does a money market account work?

You deposit money and earn dividends based on the account’s rate and your balance. Some accounts use a tiered structure, meaning higher balances may qualify for higher rates. When comparing accounts, look at the annual percentage yield (APY), which reflects annual earnings with compounding, along with fees and balance requirements.

Money market account vs. savings account: What’s the difference?

Both help you set money aside and earn a return. Money market accounts may offer higher rates than traditional savings accounts but can require a larger opening deposit or ongoing balance. Some also offer check-writing access. Always compare the account terms to understand the tradeoffs. A money market account can be useful for separating savings from everyday spending. Consider what you’re saving for, how soon you’ll need the money, and the balance you expect to maintain.

Are money market accounts insured?

At USC Credit Union, eligible money market deposits are federally insured by the NCUA. Standard coverage is $250,000 per share owner, per insured credit union, for each account ownership category. Accounts in the same ownership category are generally combined when calculating coverage. A money market account is different from a money market mutual fund, which is an investment and does not receive NCUA share insurance. Before opening an account, review current rates, fees, minimum balances, and transaction rules to find the option that fits your goals.

Ready to give your savings room to grow?

Explore USC Credit Union’s Money Market Accounts to compare options and get started.