At Jovia, we believe that understanding your options is the first step toward making confident financial decisions. That’s why we’ve put together this guide to help you learn what a money market account is, how it’s different from other accounts, and how it may benefit you.

What is a Money Market Account?

A Money Market Account (MMA) is a type of savings account that usually offers a higher dividend rate than a traditional savings account. What sets it apart is its flexibility. A money market account is a safe and practical way to grow your funds without giving up access to them. Keep in mind that money market accounts often have a minimum average monthly balance requirement to earn dividends.

Are money market accounts NCUA-insured?

When you open a money market account at a credit union like Jovia, your funds are insured by the National Credit Union Administration (NCUA), giving you peace of mind that your money is secure.

How Does a Money Market Account Compare to Other Accounts?

Money Market Accounts vs. Certificate Accounts

Certificate accounts often offer higher dividend rates than money market accounts, but the trade-off is flexibility. With a certificate account, your money is locked in until the end of the term, and withdrawing early usually comes with a penalty. A money market account, on the other hand, allows you to access your funds while still earning dividends. 

Money Market Accounts vs. Checking Accounts

While both accounts offer ways to manage your money, they have different purposes. Checking accounts are great for everyday spending. A money market account is not intended for daily transactions, but rather for occasional access to your funds. 

Money Market Accounts vs. High-Yield Savings Accounts

High-yield savings accounts and money market accounts typically both offer better dividend rates than traditional savings accounts. However, money market accounts often offer more convenient access to your funds, such as check-writing capabilities. 

Types of Money Market Products: 

There are two types of money market products you may hear about:

  • Money Market Accounts (MMAs): These are offered by credit unions and banks, are insured by the NCUA or FDIC, and provide a safe, low-risk way to earn dividends.
  • Money Market Mutual Funds: These are investment products that invest in short-term securities. While they can offer slightly higher returns, they are not federally insured, which means they carry more risk than a personal account.

Can you withdraw money from a Money Market Account?

Yes, with a Money Market Account, you can use a debit card to withdraw money from the account. Money Market Accounts offer easy access to funds; however, there may be a limit on the number of transactions.

Do you pay taxes on a Money Market Account? 

Yes, you must pay taxes on the dividends earned from a money market account, as this dividend is considered taxable income.

Is a Money Market Account Right for You?

A money market account may be a good choice if you want your savings to grow at a competitive rate but still want the reassurance of being able to access your funds if needed. It’s a straightforward and reliable way to build savings while striking a balance between growth and flexibility. Open a Money Market Account with Jovia here! 

At Jovia, our goal is to help you understand your options so you can choose the account that fits your goals best. Whether it’s a money market account, a share certificate, or another savings tool, we’re here to guide you every step of the way. Check out our rates here!