Define: Money-Market Account

A money-market account is a type of savings account offered by banks and credit unions that typically offers higher interest rates compared to regular savings accounts. It allows individuals to earn interest on their savings while still having easy access to their funds.

Unlike a regular savings account, a money-market account usually requires a higher minimum balance and may have limitations on the number of withdrawals or transfers allowed per month. Additionally, money-market accounts often offer higher interest rates.

Yes, money-market accounts are typically insured by the Federal Deposit Insurance Corporation (FDIC) for banks or the National Credit Union Administration (NCUA) for credit unions. This means that if the bank or credit union fails, your money up to $250,000 is protected.

Yes, most money-market accounts allow you to write checks, although there may be limitations on the number of checks you can write per month. This feature provides more flexibility in accessing your funds compared to a regular savings account.

Some money-market accounts may charge monthly maintenance fees or fees for falling below the minimum balance requirement. It is important to review the terms and conditions of the account before opening one to understand any potential fees.

While money-market accounts offer check-writing capabilities, they are primarily designed for saving rather than everyday transactions. It is recommended to use a checking account for day-to-day expenses and keep the money-market account for longer-term savings goals.

Yes, most banks and credit unions offer online access to money-market accounts, allowing you to view your balance, make transfers, and manage your account conveniently from your computer or mobile device.

Interest earned on money-market accounts is generally taxable as ordinary income. You will receive a Form 1099-INT from your bank or credit union at the end of the year, which you will need to report on your tax return.

Yes, you can have multiple money-market accounts with different banks or credit unions. However, it is important to consider the minimum balance requirements and fees associated with each account before opening multiple accounts.

While money-market accounts are generally considered low-risk investments, they are not completely risk-free. The value of the investments held by the account may fluctuate, and in rare cases, the account may lose value. However, the likelihood of losing money in a money-market account is relatively low compared to riskier investments.