How Much Money Is Needed When Opening a Money Market Account?

by Linda Ray

A money market account, also referred to as a money market deposit account, is similar to a savings account. You make deposits and withdrawals through a banking institution or through online transactions. You may be offered checks or a debit card to access your funds. Different rules apply to money market deposit accounts, sometimes called MMDAs, that vary from bank to bank.


At some local banks, you can open a savings account with as little as $1, though most banks today require closer to $50 to start a standard passbook savings account. Money market accounts, on the other hand, usually have higher minimum deposit requirements. Local credit unions may offer the money market options that start as low as $250. Many commercial banks require a minimum of $1,000 to open a money market account. At the same time, financial institutions that exist primarily online, such as SallieMae, have no minimum requirements for opening a MMDA.


A money market account is similar to a savings account, but it usually pays higher interest. For example, as of the time of publication, the North Carolina State Employees Credit Union pays .25 percent on its interest bearing checking accounts and 1 percent on its membership savings accounts. Interest was 1.25 percent on its money market accounts. The interest rates on the money market accounts may fluctuate higher when markets allow. You can transfer money in and out of a money market account through electronic banking and can access funds through automated teller machines. The Federal Deposit Insurance Corporation (FDIC) protects the money you deposit in a money market account up to $100,000.


Fees usually are waived as long as you maintain a minimum balance on your money market account. The minimum usually is the same as your initial deposit. For example, if the bank requires $1,000 to open a money market account, you must maintain a $1,000 minimum balance to avoid monthly maintenance fees. Other rules can apply to money market accounts as well. The number of withdrawals you can make each month may be limited; the common limit is six transactions per month.


Interest rates can change on money market accounts, unlike most savings accounts that remain consistent. While the rate can go down, they also can increase when the market is strong. You can shop around for introductory interest rates that many banks offer to first-time customers. Some banks offer checks with MMDAs, while others provide only an ATM card. Interest rates may be applied differently as well. While most banks compound interest daily, other offer quarterly compounded rates.

About the Author

Linda Ray is an award-winning journalist with more than 20 years reporting experience. She's covered business for newspapers and magazines, including the "Greenville News," "Success Magazine" and "American City Business Journals." Ray holds a journalism degree and teaches writing, career development and an FDIC course called "Money Smart."

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