8 Advantages of Money Market Accounts to Know
Discover how you can leverage the power of a money market account by learning the top 8 advantages in 2025.
Updated 
10 min. read
Interested in earning more on your savings without tying up your money? The advantages of money market accounts make it possible. These accounts take things a step further than traditional savings options, typically offering higher interest rates and added flexibility.
What is a money market account?
A money market account, sometimes abbreviated to MMA, is a type of deposit account that typically provides higher interest rates and easier access to funds than a standard savings account.
In general, this type of account lets you save for the future while earning interest and often provides options for a limited number of monthly withdrawals, checks, or debit card transactions. We’ll dive deeper into how money market accounts work and their unique benefits below.
What makes a money market account different vs. other savings products?
While money market accounts and traditional savings accounts have many features in common, such as earning interest as soon as you deposit funds, they also have some key differences. For example, a money market account often comes with higher minimum deposit requirements, but greater flexibility and convenience in accessing your savings.
Because they are not subject to market fluctuations in principal value and typically have a higher yield than comparable alternatives, money market accounts are ideal for those with medium-size savings goals, which might include:
- Building an emergency fund
- Saving up for a big purchase, like a new car or home appliance
- Planning an event, such as a wedding or dream vacation
Let’s take a closer look at the advantages of a money market account.
Advantage #1: Higher interest rates for faster returns
More often than not, money market accounts provide more competitive interest rates than traditional savings accounts. With a higher rate, not only do you experience more immediate growth, but you also benefit from greater earning potential as that growth amplifies over time, relative to those traditional options.
Advantage #2: Easy access to your funds
Unlike certain investment accounts or certificates of deposit (CDs), a money market account gives you the flexibility to access your funds as needed—without waiting for long-term maturity dates. Whether it’s for an unexpected expense or a planned project, this accessibility is incredibly useful. However, keep in mind that specific account terms such as minimum balance requirements, monthly withdrawal limits, and fees for exceeding transaction thresholds can reduce ease of access to your funds and overall liquidity.
Advantage #3: Provides stability during market fluctuations
Money market accounts are viewed as stable and secure, largely due to their high liquidity and ability to preserve value over time. Unlike stocks or bonds, which can experience significant price volatility, these accounts offer a more stable option for individuals seeking a secure place to store funds while still earning competitive interest rates. This makes them particularly appealing during periods of economic uncertainty, when minimizing exposure to market swings is crucial.
Additionally, money market accounts are insured by the Federal Deposit Insurance Corporation (FDIC), which safeguards your deposits up to $250,000 per depositor, per FDIC-insured bank, per ownership category. This means that even in the unlikely event of a bank failure, your funds are safeguarded up to that amount, adding another layer of protection.
Advantage #4: Convenient check-writing privileges
If you need an account that offers check-writing functionality, a traditional savings account typically won’t meet your needs.
Most money market accounts, however, combine the benefits of higher interest rates with features designed for greater flexibility, including limited check-writing privileges, ATM access, and sometimes even debit cards. This unique blend of savings and transactional capabilities makes money market accounts an attractive alternative for managing planned expenses without compromising your earning potential.
Ready to open your money market account?
Competitive interest rates and convenient access to your funds are just a few steps away.
Advantage #5: Ideal for midsize savings goals
Saving up for that pricey purchase, planning a major life event, or looking to put some funds away for a rainy day? Money market accounts are an effective means to work toward making each of those visions a reality. With medium-sized savings goals like these, a stable liquid account that offers a competitive interest rate can help you save toward your goals and stay protected from unforeseen circumstances.
Starting an emergency fund, for example, is a great use case for a money market account. It’s FDIC-insured and earns interest over time, but you can still access your funds.
Advantage #6: Supplemental retirement savings
When trying to set yourself up for a comfortable retirement, you’re probably focused on the traditional IRA, Roth IRA, and 401(k). But what if you’ve maximized each of their annual contributions? This is where a money market account can play a valuable role as a supplemental retirement savings option.
Unlike tax-advantaged accounts that have restrictive caps, money market accounts enable you to continue growing your savings without limitations on contributions. While these accounts might not offer the same tax benefits as retirement-specific accounts, they can be an effective tool for parking additional funds and earning interest in a relatively stable environment.
Advantage #7: A smart choice for small businesses
For small business owners, building and maintaining a strong savings foundation is crucial for long-term sustainability and success. A money market account can be an ideal financial tool for this purpose, offering the potential for higher interest rates compared to traditional savings accounts while keeping your money accessible for unexpected expenses.
For any business owner looking to enhance their savings potential, BMO’s Business Platinum Money Market account is worth considering.
Advantage #8: Flexible access to online banking features
Various money market accounts provide consumers with flexible access to key online banking features, such as:
- 24/7 account access
- Online payments and deposits
- Money transfers
- Budgeting and planning tools
- Alerts and notifications
For example, BMO Total Look is an all-in-one online money management tool that’s available to all money market account holders. And let’s not forget BMO Digital Banking, which makes banking online easy and convenient.
Limitations of money market accounts
While there are plenty of money market account advantages, they are also not without their limitations. Taking the time to understand these limits and how they might affect your day-to-day is crucial to achieve your savings goals.
Potential drawbacks include:
• Product fees: Money market accounts may charge regular maintenance or service fees that reduce your overall returns.
• Minimum balance requirements: Most money market accounts require you to maintain a minimum balance to avoid a monthly fee, and accounts with higher interest rates often come with higher minimum thresholds.
• Limited withdrawals: You’ll typically face restrictions on the number of withdrawals you can make per month—often no more than six.
• Transaction fees: You may incur additional fees if you exceed the permitted number or dollar amount of transactions in a month.
For added convenience and flexibility, consider complementing your money market account with a checking account, like BMO’s Relationship Checking.
Final thoughts on money market account advantages
A money market account is a valuable tool that can help you save money, earn interest, and maintain access to your funds. It’s a great choice if you’re looking to park your money somewhere financially stable and accessible.
A money market account can also offer a higher interest rate and more competitive yields than typical savings accounts. Not to mention, many let you write checks and use a debit card for limited purchases and withdrawals. Plus, money market accounts are insured by the FDIC, making them safe and secure.
BMO’s Growth Money Market account is worth considering as part of your personal savings growth strategy. If you’re a business owner, our Business Platinum Money Market account is also a good option to help you manage and grow your business savings.
To learn more and see whether a BMO money market account is the right product for your savings needs, you can reach out to a BMO representative by phone at 1-888-340-2265.
FAQs on money market accounts
Yes, you can regularly add funds to a money market account. There aren’t usually any restrictions on deposits; flexibility is a key benefit of the money market account.
No, money market funds are not the same as money market accounts. A money market account is a type of deposit account that earns interest and is FDIC-insured. In contrast, a money market fund is a type of investment—a mutual fund—that invests in short-term securities.
Minimum deposit and balance requirements for money market accounts vary widely depending on which financial institution you use. For both, required minimums can range from $0.01 all the way to $10,000 or more.
No, money market accounts cannot lose your principal due to market changes because they are deposit accounts protected by FDIC insurance up to $250,000 per depositor, per FDIC-insured bank, per ownership category. However, they may have fluctuating interest rates and fees that can affect returns.
Related articles
What is a money market account?
CDs vs. Money Market Accounts: Which one should you choose?
