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A money market account (MMA) is a type of deposit account offered by banks and credit unions that combines features of savings and checking accounts, typically earning higher interest rates than standard savings accounts while providing limited access to funds.
These accounts invest deposited money in short-term, low-risk securities such as Treasury bills, certificates of deposit, and commercial paper, which allows for potentially better yields in exchange for maintaining a higher minimum balance requirement.
Unlike regular savings accounts, MMAs often include check-writing privileges and debit card access, but federal regulations may limit transactions to six per month to avoid fees or account conversion.
Interest rates on MMAs can fluctuate with market conditions, so they perform best in rising rate environments but may offer variable returns compared to fixed-rate options like CDs.