FDIC-insured
MMAs are deposit accounts. If you open an MMA with an FDIC-insured bank, your money would generally be insured by FDIC up to $250,000 per depositor, per ownership category.
Easy access to your cash
Although some banks may limit certain monthly withdrawal transactions, you’d still generally be able to access your MMA funds when you need them. In fact, some MMAs come with checks or a debit card, which can make the withdrawal process even easier. Some withdrawal options, like using an ATM or going to the bank in person, may not have any withdrawal restrictions.
Separate your savings
MMAs let you separate your savings from your checking account, which can make it easier to achieve your savings goals. As an added convenience, you may be able to automate transfers to your MMA. For example, your account may allow you to set up automatic transfers from your checking account.
Drawbacks of money market accounts
MMAs can be useful tools, but like any tool they can have drawbacks. Most MMA accounts have variable interest rates, which could dip in the future. Some MMAs may have minimum balance requirements to open the account, earn the APY and avoid fees. Withdrawal transactions may also be limited depending on the bank, which could also be challenging for accountholders interested in keeping their funds accessible.
Deciding whether a money market account is right for you
As savings products, MMAs may be able to help you make headway on both short- and long-term financial goals. If you’re saving for an upcoming trip, depending on the rates offered, an MMA may help you reach that goal faster. Or, if you’re building an emergency fund, the debit card or checks that may come with MMAs can help when unexpected expenses pop up.
Reviewing the potential limitations and account requirements can help you understand if MMAs are a good fit for you.
Disclosure: This article is for general educational purposes. It is not intended to provide financial advice. It also is not intended to completely describe any Citi product or service. You should refer to the terms and conditions financial institutions provide for various products.
