A money market account (MMA) is a kind of savings account offered by banks and credit unions. The difference between the normal savings account and the money market account is that the MMA offers higher interest rates. However, the money market account requires a higher minimum balance than the normal savings account.

The important feature of MMA is that the money saved in the bank under this option is insured by the Federal Deposit Insurance Corporation (FDIC). With this insurance facility, you can ensure the safety of your deposit; even if the bank goes bankrupt, you will not lose a single penny from your savings. The FDIC was formed in 1933 with a view to save the customers, especially those of the failed banks.

Money market account works in a similar manner as a normal account works. You earn interest for your deposits, and as you wish you can withdraw any amount of money from it. However, there are certain limitations for the number of transactions in a month; usually an MMA account enables you to have three to six withdrawals and a maximum three checks a month. The bank will charge you a service fees for any extra transactions from your account. Normally it is between $5 and $15 per extra check in a month. Also you will be penalized if your account runs short of the minimum balance as per the terms of the bank. These service charges, however, may differ from bank to bank. It is advisable that you do a thorough study on the operation of the MMA of different banks before selecting the one for you, so that you don't lose the money in the form of hefty service charges.

As soon as you join an MMA, you will be issued an account register, in which you will record your transactions clearly. At the end of each month, the bank will send you a statement of the transactions, by which you can verify the account details. If you keep this MMA run properly, by maintaining a good credit history and transactions, you are likely to benefit more from the high-interest savings than any other similar savings accounts.

Some banks and credit unions offer a modified version of MMA. It is called the High Yield Money Market Investment Account (HY MMIA). This is meant for accounts that can keep reasonably higher account balance. If your account balance is above certain limit (often stipulated by the banks), you will be able to convert your MMA into HY MMIA. The HY MMIA offers interest rates in proportion to the account balance. Higher the balance, higher is your savings as interest. This kind of interest rate offered by HY MMIA is often referred as ‘tiered' interest rates. As in the MMA, this account also allows you to withdraw the money as per your requirements.

In short, the money market account is a disciplined and efficient way of saving money. Also the involvement of FDIA with MMA makes it one of the most secure forms of deposits through banks.