A Money Market Account (MMA) might be the right choice for you if you’re looking to earn interest while having access to your funds.
An MMA can fit into any personal wealth savings plan, but it’s more open-ended and flexible than a retirement or college savings account.
Here are five main benefits to Money Market Accounts.
1. FDIC Insured
Money Market Accounts are FDIC insured up to insurance limits†. This is a big advantage for MMAs as compared to a brokerage account or money market fund where your deposited money is at risk from market fluctuations.
2. Higher Interest Rates and Compound Interest
In addition to being FDIC insured, Huntington’s Money Market Accounts typically earn a higher interest rate than our other deposit savings accounts. Huntington Money Market Accounts earn interest that is calculated daily and compounded and applied monthly. This means the interest you earn is added to your balance, then during the next month, you earn interest on your new balance. Understanding compound interest can be difficult, but, in short, it’s how your money works for you. You can use a savings calculator to help figure out how much you’re earning through interest.
3. Liquid Savings
Liquidity is one of the biggest advantages of an MMA. Liquidity, in a financial sense, means the degree to which an asset can be converted to cash. MMAs provide a high degree of liquidity which makes them good for long-term savings, emergency savings, or a future large purchase. MMAs are classified as savings accounts, and as such, regulations limit the number of transfers that can be made from Money Market Accounts during the calendar month or statement cycle.
You have access to your cash through ATM’s, in-branch teller services, and check-writing privileges. Since you can add or withdraw money at any time, Money Market Accounts are especially useful when you have maxed-out your IRA or 401K contributions. There are no annual contribution limits with an MMA.
4. Online and Mobile Banking
You can access your MMA balance through online or mobile banking. All you need is a connected device and you can check balances, pay bills, transfer money, view accounts, and more. That’s banking convenience at your fingertips.
5. Digital Savings Tools
Huntington's digital savings tools can help you save money and track your progress along the way. Set financials goals with Savings Goal Getter℠, a tool that can help you save for both big or small financial goals.
Money Market Account
Earn Higher Interest on Your Savings Goals
A Money Market Account can help add value to your current personal wealth savings plan. Grow your savings to reach your long-term goals, budget for quarterly payments, fund a child’s tuition and more.
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There are many ways you can use your MMA to benefit your lifestyle such as building an emergency fund, budgeting for quarterly payments, saving for college, and much more. MMAs, CDs, deposit savings accounts, brokerage accounts, and retirement savings accounts all play a role in a wealth-building portfolio, and MMAs provide a combination of liquidity and access wrapped up with the security of being FDIC insured.
† Federal Deposit Insurance Corporation. “Insured or Not Insured?” Accessed December 2020.
Savings Goal Getter℠ is a service mark of Huntington Bancshares Incorporated.
The information provided in this document is intended solely for general informational purposes and is provided with the understanding that neither Huntington, its affiliates nor any other party is engaging in rendering financial, legal, technical or other professional advice or services, or endorsing any third-party product or service. Any use of this information should be done only in consultation with a qualified and licensed professional who can take into account all relevant factors and desired outcomes in the context of the facts surrounding your particular circ*mstances. The information in this document was developed with reasonable care and attention. However, it is possible that some of the information is incomplete, incorrect, or inapplicable to particular circ*mstances or conditions. NEITHER HUNTINGTON NOR ITS AFFILIATES SHALL HAVE LIABILITY FOR ANY DAMAGES, LOSSES, COSTS OR EXPENSES (DIRECT, CONSEQUENTIAL, SPECIAL, INDIRECT OR OTHERWISE) RESULTING FROM USING, RELYING ON OR ACTING UPON INFORMATION IN THIS DOCUMENT EVEN IF HUNTINGTON AND/OR ITS AFFILIATES HAVE BEEN ADVISED OF OR FORESEEN THE POSSIBILITY OF SUCH DAMAGES, LOSSES, COSTS OR EXPENSES.
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FAQs
Money market accounts are safe. Since they're deposit accounts, they qualify for FDIC insurance. They also typically pay an interest rate your financial institution guarantees. Your balance will grow over time and can't lose value, unlike an investment.
What are the advantages of a money market account? ›
Money market accounts are safe. Since they're deposit accounts, they qualify for FDIC insurance. They also typically pay an interest rate your financial institution guarantees. Your balance will grow over time and can't lose value, unlike an investment.
What is a money market account MMA and how does it work? ›
Similar to a high yield savings account, a money market account offers the security of a federally insured deposit account paired with a competitive interest rate. But unlike traditional savings accounts, money market accounts make it easier to pay for big-ticket purchases directly from your account.
What is one important advantage of the money market account over the transactional savings account? ›
Higher interest rates: Because credit unions and banks invest MMA funds in short-term, stable financial instruments, they can offer higher interest rates. Account holders can expect to see their savings grow at a faster rate, making MMAs an attractive option.
How can I benefit from money market? ›
(1) Short-term goals. Money market funds are useful for short-term goals, such as saving for a vacation, a wedding, or a down payment for a house. In these cases, it may be more important that your savings hold their value over the shorter time period. (2) Maintaining an emergency reserve.
What are the advantages and limitations of money market? ›
While the money market offers high liquidity, low risk, competitive interest rates, and diversification, it also comes with relatively low returns and a lack of potential interest rates and credit risks on which investors can base their financial goals and risk tolerance.
What are money market accounts best for? ›
Easier access to funds than with traditional savings accounts because of debit card and check-writing features, which might be helpful in an emergency. Some institutions require high minimum balances to open an account or avoid fees. Rates might be lower compared to some high-yield savings accounts.
What is the downside of a money market account? ›
Indirectly losing money, however, is a downside of money market accounts. Indirect loss can occur if the interest rates tied to the account fall, thus diminishing the initial return value of your account.
What does MMA mean account? ›
A money market account is a type of account offered by banks and credit unions. Like other deposit accounts, money market accounts are insured by the FDIC or NCUA, up to $250,000 held by the same owner or owners. Money market accounts tend to pay you higher interest rates than other types of savings accounts.
Is MMA better than savings account? ›
On average, MMAs provide higher returns than savings accounts. 5 But the best savings account rates can compete with the best MMA rates.
Because you earn higher interest rates than with a traditional savings account, a money market account can be a great choice to set aside some emergency cash or start building your savings. And unlike a traditional savings account, you have more options for withdrawing your money when you want it.
Can I withdraw money from a money market account? ›
You can withdraw money from your money market account whenever you'd like. However, your bank may place limits on how many withdrawals you can make in a single statement period. Additional withdrawals typically incur a fee.
What are the risks of the money market? ›
Because they invest in fixed income securities, money market funds and ultra-short duration funds are subject to three main risks: interest rate risk, liquidity risk and credit risk.
What are the advantages of MMF? ›
Money market funds invest in highly liquid securities like cash, cash equivalents, and high-rated debt-based securities. Because they only invest in highly rated securities, money market funds offer a high degree of safety. Money market funds also offer investors higher yields than traditional savings accounts.
What is the safest type of money market fund? ›
U.S. government money market funds are typically regarded as the safest of the three, and within that category, those with a high concentration of Treasuries—with full government backing—would be exposed to a lower likelihood of default risk.
How does money grow in a money market account? ›
How Do Money Market Accounts Work? Money market accounts work like other deposit accounts, such as savings accounts. As customers deposit funds in a money market account, they earn interest on those funds. Typically, interest on money market accounts is compounded daily and paid monthly.
Is there a penalty for taking money out of a money market account? ›
Federal regulations that govern savings account withdrawals don't apply to ATMs. So you can make unlimited ATM withdrawals from your money market account without penalty. Many banks also let you to write a limited number of checks from your money market account. You can't do this with most savings accounts.
Does money grow in a money market account? ›
How Do Money Market Accounts Work? Money market accounts work like other deposit accounts, such as savings accounts. As customers deposit funds in a money market account, they earn interest on those funds. Typically, interest on money market accounts is compounded daily and paid monthly.
