Money Market Account Calculator

A money market account (MMA) is a bank or credit union deposit account that pays interest, usually at a higher rate than a basic savings account, while still allowing withdrawals and often check-writing or debit card access. It typically requires a higher minimum balance than a savings account and may pay a tiered rate that rises above certain balance thresholds.

Use A = P(1 + r/n)^(nt), where P is your balance, r is the annual rate as a decimal, n is the compounding frequency per year, and t is the term in years. For $10,000 at 4.5% compounded monthly for 5 years, A = 10,000 x (1 + 0.045/12)^60 = $12,517.96, an interest gain of $2,517.96.

A money market account is liquid: you can withdraw funds at any time, subject to the bank's monthly withdrawal limit, and the rate can change. A CD locks your money for a fixed term at a fixed rate and charges an early withdrawal penalty if you take funds out before maturity. CDs often pay a slightly higher rate in exchange for that reduced liquidity.

Both are liquid deposit accounts, but money market accounts usually require a higher minimum balance and pay a higher interest rate in return, sometimes with tiered rates that increase at higher balances. Money market accounts also more commonly offer check-writing or debit card access, features a plain savings account rarely includes.

Many money market accounts still cap the number of convenient withdrawals or transfers per month, often around six, even though the federal rule that formally mandated this limit was suspended in 2020. Check your specific account's terms, since exceeding the limit can trigger a fee or account conversion.

Regular monthly deposits compound alongside your starting balance, so each deposit earns interest from the month it is added. On $10,000 at 4.5% for 5 years, adding $200 a month raises the future value from $12,517.96 to $25,947.07, since $22,000 will have been deposited by the end and it earns compound interest along the way.

APY, or annual percentage yield, is the effective annual return once compounding is included, calculated as (1 + r/n)^n minus 1. A 4.5% nominal rate compounded monthly gives an APY of about 4.594%. Comparing money market accounts by APY, not the quoted nominal rate, is the fair way to judge which pays more.

Yes, money market accounts at FDIC-member banks are insured up to the standard federal limit per depositor, per institution, per ownership category, the same protection as savings accounts and CDs. Credit union equivalents carry equivalent NCUA insurance. This makes them a very low-risk place to hold cash you may need on short notice.

No. A money market account is an FDIC-insured bank deposit account. A money market fund (or money market mutual fund) is an investment product that holds short-term debt securities and is not FDIC insured, though it is generally considered low risk. The two are often confused because of the similar name, but they carry different protections.

Daily compounding earns slightly more than monthly, which earns more than quarterly, for the same nominal rate, because interest starts earning its own interest sooner. On $5,000 at 3.8% for 3 years, quarterly compounding gives $5,600.75. The gap versus daily compounding at the same rate is only a few dollars over three years, so the nominal rate matters far more than the compounding frequency.